The European Union is trying to avoid the ghost of a recession over Russia’s invasion of Ukraine

Will Russia’s invasion of Ukraine move Europe into a new recession? The mantra between the 19 eurozone countries and those responsible for the European Commission’s economy is that the war is slowing economic growth, but not to the point where Europe is in recession – two consecutive quarters of failure. In GDP -. Indeed, the EU is coming out of a pandemic that has led to an invisible crisis over the last 100 years between 2020 and 2021. As a result of the corovirus crisis, the EU has begun rebuilding funds, which has begun for the second time. Half of 2021 and 2022 were the years of full recovery expected, with high levels of growth enabling green and digital transitions.

But on February 24, Russian President Vladimir Putin invaded Ukraine and all predictions exploded, as the European Commission itself has recently acknowledged. However, the public authorities are trying to avoid the worst case scenario.

Thus, European Commission Vice President for Economic Affairs Valdis Dombrovskis confirmed during his visit to the European Union in Luxembourg on Monday: “Our current assessment is that the consequences of the war in Ukraine will be a slowdown in the economy, a significant slowdown. Growth in the EU, but not a recession.

“There is a general prediction that an unwarranted attack on Ukraine could have the effect of slowing down the economic recovery, but that does not put this strong recovery at risk,” added Nadia Calvino, Spain’s vice president of economic affairs.

In this regard, the European Commissioner for Economic Affairs, Paolo Gentiloni, said: “We have to look at the data. We have a clear and strong turnaround compared to last year. And that’s what keeps us in the positive zone if we look at 2020 and 2022 as a whole. But in any case, we are responding to military aggression not by military means but by supporting Ukraine and isolating and weakening Russia. It is a decision where we do not go to war, we do not escalate the war, but it comes at a price. It is clear that we will have to address the cost of these sanctions and this reaction. This is not a war, but it is not free. If we answer, we have to pay the price and we are ready to do it. ”

“We have very high inflation,” Gentilon said, “but we still have common investment plans and the overall picture should not be seen as a recession. Sure, there are risks, but there is also a lot of energy in our economy to keep growth levels albeit reduced.

Are you worried that new sanctions on Russia will further slow down Europe’s economy? “This will also be one of the topics of discussion today [por el Eurogrupo de este lunes]Explains Dombrovsky: “What impact will it have on the economy?” What does it mean, for example, that the supply of Russian gas to the EU is cut off for any reason, or because the EU is suspending the sanction, or because Russia itself decides to cut it off? We see these types of scenarios, but there is a conclusion that it is possible to deal with a similar situation even without problems. ”