The Ukraine crisis and the West's sanctions on Russia will pose fiscal and growth challenges to the sovereign credit status of eurozone states that would not be unlike the COVID-19 pandemic, Fitch Ratings said on Thursday. 

The credit rating agency said that the impact and design of the policy responses to the crisis will be important in assessing the sovereign credit impact. "Like the pandemic, the war is an external shock that will be felt across the bloc and its impact will vary, for example with dependency on Russian gas, or trade linkages." 

One particular sting for eurozone states will come from the increased imports of liquefied natural gas, in addition to other infrastructure, to replace Russian energy supplies, which these states are planning to phase out over the coming five years.

"The energy market is the main macroeconomic transmission channel via higher prices. Russia accounted for 38% of EU natural gas imports and 23% of oil imports in 2020," Fitch said.

The extent to which growth will be hit will depend on the scale of the disruption, including through energy availability and prices, meaning that the disruption will be greater if energy is rationed.