EU at risk of recession if Russia gas supplies cut immediately
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The EU Commission says the European Union risks an economic recession if Russian gas supplies are cut immediately.
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The EU is now drafting a sixth sanctions package against Russia
The European Commission said on Monday that if Russian gas supplies are cut outright, then the European Union risks an economic recession.
The sixth package of sanctions that the EU is currently drafting against Russia is expected to include an oil embargo if the commission succeeds in securing the consent of all member states.
The Commission said in a press release that in the case of an outright cut in gas supply from Russia, GDP growth rates in Europe "would be around 2.5 and 1 percentage points below the forecast baseline in 2022 and 2023, respectively, while inflation would increase by 3 percentage points in 2022 and by more than 1 in 2023, above the baseline projection."
The statement also said that the war in Ukraine is leading to the EU's economic separation from Russia, and the consequences of this separation are difficult to fully understand at this point.
Gas costs in Europe have been volatile amid the crisis in Ukraine and increasing sanctions against Russia. Fears of sanctions on Russian energy sources in Europe sent prices spiking in March beyond their historical highs.
The World Bank said in April that it is expecting gas prices to double.
