Brussels, Europe Brief News – Russian invasion of Ukraine has brough unprecedented impact on European Markets. Recently, the European Union has responded to Russia through introducing many sanction packages. Few days back, EC has adopted the sixth Package of sanctions against Russia. Under the sixth Package, the council has agreed to impose a ban on Russian crude oil and petroleum products, with limited exceptions on crude oil.
European leaders also reviewed progress on the phasing out of Russian fossil fuel imports, considering the EU member states different energy mixes and circumstances.
They suggested further diversifying energy supply sources and routes to enhance energy networks and interconnections.
European Markets Plunge Due To Russia Ukraine War 2022
The European Council also addressed food security and affordability challenges. They strongly condemned the destruction of agriculture production by Russia in Ukraine.
The council even proposed a plan to build solidarity channels to connect Ukraine with world agricultural markets. This way, Ukraine will remain connected to the global agricultural arena.
Russia has been waging an unjustified and unprovoked war against Ukraine since 24 February 2022. From the start of the invasion, there has been a sharp increase in the prices for key commodities, particularly fuel in Europe that eventually brings many economic implications for the region.
Furthermore, the concerns have grown over the Security of both energy and food supply in both the EU and worldwide.
1- Energy Prices and Security of Supply
The price of fuels has gone sky-high because of the ongoing war between Russia and Ukraine. It also concerns the Security of energy supply in the EU. Russia has further crushed the hopes as the country decided to suspend gas deliveries to several EU member states.
On 3 June, the council imposed a ban on Russian oil imports after reaching an agreement with the EU leader in their special European council meeting.
Oil Tops $121
– EU leaders agree on sanctions on Russian oil imports
– European Council President: this “covers more than 2/3 of imports from Russia”
– European Commission President: will “effectively cut around 90% of oil imports from Russia to EU by end of the yr”#stocks
— Prashant Nair (@_prashantnair) May 31, 2022
On 31 May 2022, the European Council agreed on a ban on almost 90% of all Russian oil imports by the end of the year. Taking account of the EU member states different energy mixes, conditions, and circumstances, EU leaders called for:
-Further diversifying energy supply sources or routes
-Accelerating the deployment of renewables
-Further, improve energy efficiency
-Improving the interconnection of gas and electricity networks
On 19th may 2022, the council agreed with the European parliament on new regulation on gas storage. The European Commission coined the idea of gas storage in March.
The plan is that All the EU member states will fill gas storage before the next winter season and be subject to sharing it with the states that have no storage facilities.
On 2nd may 2022, EU energy ministers held an extraordinary Council meeting to discuss the energy situation in the EU in the context of the suspension of gas deliveries by Gazprom to some EU member states.
2- Food Markets
Russia’s military aggression against Ukraine is having a direct impact on global food security and affordability. In the EU, the Common Agricultural Policy (CAP) ensures the availability of food, feed, and fertilizer.
The EU is largely self-sufficient, and its single market is good enough to absorb shock. It can ensure food security for EU citizens and guarantee income support for European farmers.
However, the reduction in imports of wheat, maize, rapeseed, and sunflower oil and meal from Ukraine has a significant impact on the EU’s food industry.
Mediterranean Ministerial Dialogue on the Food Security Crisis
With the European #FARM initiative, France and the EU stand with the EU’s Mediterranean neighbours exposed to the #Ukraine war’s consequences for food supplies.@MinColonna pic.twitter.com/Z2XQJm3qXY— France Diplomacy🇫🇷🇪🇺 (@francediplo_EN) June 8, 2022
The Russia-Ukraine war is having a severe impact on the high market prices, and food affordability remains a concern for the EU.
EU leaders discussed food security and affordability at the special meeting of the European council. They strongly condemned Russia’s destruction and illegal appropriation of agricultural production in Ukraine.
They called on Russia to end its attack on transport infrastructure in Ukraine, lift the blockade of Ukraine’s black sea ports and allow food experts, in particular from Odesa.
At their May council meeting, the Agricultural minister agreed on the plan of the European Commission to create solidarity channels to facilitate food exports from Ukraine.
This action aims to overcome Russia’s blockade of Ukrainian black sea ports to ensure that Ukraine remains connected with the global agricultural market.
3- Mobility of People and Goods
Russia’s invasion of Ukraine had a huge impact on the mobility of people and goods in the EU across different modes of transport. Among the main issues are fuel supplies and increasing fuel prices.
In addition, imports of goods and the large influx of Ukrainian refugee toward EU countries has led to further operational challenges for the sector.
All Ukrainian refugees in the EU are temporarily considered legal residents and have the right to open a basic bank account in the EU.
A basic account gives access to common services that we all need in our daily lives.
🇺🇦🇪🇺 https://t.co/a5snk6MmGM #StandWithUkriane pic.twitter.com/Jvo6CfDIJN
— European Commission 🇪🇺 (@EU_Commission) April 23, 2022
In order to show solidarity with Ukrainian refugees, member states have already adopted certain measures, such as creating a transport and information hub at the main border crossing.
EU transport ministers met through a video call on 8 April 2022 to discuss a coordinated EU response to the impacts on the transport sector.
Ministers discussed both national and EU-level measures aiming to reinforce cooperation between member states and the EU, their discussion focused on:
-Support to Ukraine
-Protecting transport workers
-Strengthening the transport sector’s resilience
