The invasion of Ukraine may cause turbulence in food and agriculture as well as years of high inflation, and should force a reckoning with financial secrecy and corrupt money within the EU, Luxembourg's commissioner has said.
"I think that we will stay with higher inflation also for the coming years, how many I don't know," the European Commissioner for jobs and social rights Nicolas Schmit told The Irish Times, noting impacts on food and energy prices were probable.
"[Russia] are still sending gas to Europe. But that may change from one day to another."
While the conflict has already driven up gas prices further, there may be additional price pressures because Ukraine is a major food and agricultural exporter, and accounts for a significant proportion of the European Union’s wheat and oilseed imports.
The interruption of imports from Ukraine due to the conflict will hit animal husbandry in the EU, particularly the pigmeat sector, the EU's agriculture commissioner, Janusz Wojciechowski, separately told journalists, describing it as a "dramatic situation".
Mr Schmit, who is the commissioner from Luxembourg where he has a background as a high-ranking social democrat politician, said the war should force a reckoning with financial secrecy and corrupt money in EU economies.
"We are in a dramatic situation. We have a war on the border of Europe, of the European Union – there is a dictator threatening us with nuclear weapons. We cannot just make business as usual," he told The Irish Times ahead of a visit to Dublin on Thursday.
“I think we have to go very seriously after the whole system, which is a corrupt system in a way. Of these people who have billions and billions of dollars or euro, and who are also part of this political authoritarian dictatorship,” he said.
“I think we have to be more tough on this kind of money laundering and huge investment and not asking where does this money come from.”
Fresh sanctions
Meanwhile the EU announced fresh rounds of sanctions designed to punish the regime of Russian president Vladimir Putin for the invasion and isolate the country and pressure the elites who support him.
The EU barred seven Russian banks from using the Swift international payments system, but spared those used for gas payments, reflecting the EU’s continued reliance on Russian imports to heat its homes and power factories.
The bloc also announced restrictions on trade with Belarus and sanctioned 22 high-ranking military figures, accusing the country of playing a supportive role in the invasion as a transit, storage, and jump-off point.
In an unprecedented move the EU announced it was prohibiting the broadcast of state-funded Russia Today and Sputnik, describing them as "concerted propaganda actions" that have a role in "bringing forward and supporting the aggression against Ukraine" in its official journal.
Their content disappeared from access across the bloc as the prohibition hit television broadcast, platforms, and apps, with national media regulators charged with enforcing the rule.
The economic turbulence caused by the conflict may delay the return of the EU's fiscal rules that restrict spending and debt, and the European Commission on Wednesday advised member states to continue investing to support recovery.
"We do not expect the recovery to derail completely, but to be weakened," said economy Commissioner Paolo Gentiloni.
