European firms suffer €100 billion in losses post war in Ukraine: FT
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The sanctions imposed on Russian sectors and the collective bailout of several European conglomerates have resulted in large losses for Europe's firms that operate in Russia.
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A woman walks past a gift shop that sells T-Shirts bearing Russian and Soviet symbols and an image of Russian Big Mac filled with Caviar, Moscow, Russia, May 23, 2022. (AFP)
Europe's largest firms have suffered at least 100 billion euros in direct losses after the beginning of the war in Ukraine in February 2022, according to the Financial Times.
This came as a result of European governments' decisions to sanction several sectors of the Russian economy, such as the financial and energy sectors.
A survey of 600 European groups' annual financial statements revealed that 176 companies recorded asset impairments, foreign exchange-related charges, and other one-off expenses due to the scaling, closure, and reduction of their businesses in Russia.
The estimated number does not take into account the post-war policies' impact on European macroeconomics, which includes inflated energy and commodity prices.
Moscow's decision to seize control of gas importers Fortum and Uniper in April 2023, as well as its appropriation of Danone and Carlsberg last month, is expected to deal further blows to European firms, according to the Financial Times.
The heaviest losses were linked to oil and gas conglomerates such as BP, Shell, and TotalEnergies, which reported combined expenses of 40.6 billion euros.
However, these companies were able to rebuff their losses by gaining large revenues, which pushed their combined profits to 95 billion euros as a result of increased energy prices.
European carmakers and industrial companies suffered €13.6 billion in losses, while utility firms' profits diminished by €14.7 billion.
In mid-July t,he Russian government took over control of the Russian branches of the French yogurt producer Danone and the Danish brewery Carlsberg, highlighting the risks that Western conglomerates face as a result of actions taken by their national governments against Moscow.
After a law passed by Russian President Vladimir Putin which allowed the government to take such steps was passed, ownership stakes of foreign origin in Danone's Russian operations, as well as Carlsberg's interest in the local brewery Baltika, were placed under the "transitory supervision" of Russia's federal property agency.
The law grants the government authority to subject foreign assets within the country to temporary regulation should Russian assets overseas be apprehended or endangered.
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