The potential income loss would be between 0.2 and 0.3% on average, across the continent, according to the CAE. The impact for France would crimstify to “a decrease of about 0.15 to 0.3%” of raw national income.
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In the full war in Ukraine, a European embargo on Russian deliveries of energy would he pyre more Russia … or Europe itself? According to the Economic Analysis Board (CAE), attached to the Prime Minister’s services, take such a sanction would have only one “relatively low impact” on the countries of the European Union (EU) and would therefore be “manageable “For this one. In charge of informing the government, the proceeding evokes a potential loss of income between 0.2 and 0.3% on average, across the continent. About 100 euros per adult, according to the note signed, Monday, April 4, by four economists, David Baqaee, Benjamin Moll, Camille Landais and Philippe Martin.
As much as the United States has decreed, as early as March 8, an embargo on hydrocarbons, so much Europe is not there yet. Apart from the Baltic countries: Lithuania has ceased imports since April, Estonia and Latvia are preparing it.
Unlike the Americans, who do not buy, Russian gas is still a considerable part in the consumption of Europeans. Why, then, announce a limited impact in case of embargo? The study explains it “by the fact that, even in the short term, companies and the economy as a whole can substitute (even very partially) sources of energy to others and intermediate or final goods to “Other”.
According to the co-authors, the impact for France would crimstify to “a decrease of about 0.15 to 0.3%” of the gross national income. In the case of Germany, the scenarios range from 0.3% to 3% for the most pessimistic. The first economy in the euro zone depends more on fossil fuels and in particular gas, where France relies mainly on nuclear power for its electrical production. Cut short to Russian gas imports “would hurt us more than Russia,” said Monday, the German Finance Minister Christian Lindner.
According to CAE projections, the consequences of an embargo could be “much larger” in some countries and would suppose “European solidarity”. This is the case for Bulgaria, Slovakia, Finland, the Czech Republic. The study goes even up to a 5% decrease in Lithuania’s gross national income.
The impact on purchasing power
An alternative to a total embargo would go through a drastic reduction of imports (about 80% less) and by taxation of remaining deliveries. This solution would be less painful for the most dependent countries of Russian supplies, including Lithuania and Bulgaria, according to the co-authors of the study.
Overall, “This is an optimistic note,” comments Jacques Percebois, Emeritus Professor of Economics at the University of Montpellier. However, it remains to solve the primordial issue of purchasing power, especially for the most vulnerable: “if prices are increasing, they may result in inequalities in household behavior.” Especially during the next winter, main heating period each year. “Gas demand being extremely seasonal, it would be crucial to define the temporality of an embargo to study its impacts,” said Anna Creti, Director of the Chair Climate Economy at Paris-Dauphine University.
Among other possibilities, the CAE mentions that of “a price cap on
The European market that would counter the speculative pressure “.