Market effects of the Russian invasion of Ukraine: EU response

On this page you will find information about:

  • the consequences of the Russian war of aggression on the markets
  • Response of the European Council and the Council

Since February 24, 2022, Russia has waged an unprovoked and unjustified war against Ukraine. Since the beginning of the invasion has world market prices for important raw materials, in particular fuel, increased sharply† Energy and food security are a growing concern in the EU and worldwide.

Energy prices and security of supply

Fuel prices have risen as a result of the war in Ukraine, which is also a cause for concern energy supply in the EU. Russia’s decision to suspend gas supplies to several EU Member States also has implications for security of supply.

On 3 June 2022, the Council adopted 6th sanction package against Russia, including the ban on oil imports, agreed by EU leaders at the extraordinary European Council in May 2022.

At the European Summit on 30-31. May 2022, EU leaders agreed to get around. before the end of the year to ban 90% of all Russian oil, with a temporary exception for crude oil supplied via pipeline. She asked the Council to complete and adopt the 6th sanction package of which this oil ban is a part – as soon as possible.

Taking into account the different energy mixes, conditions and circumstances in the Member States, the European Council called for:

  • to further develop sources of supply and routes diversify
  • the roll-out of renewable energy to speed up
  • that energy efficiency to improve further
  • that interconnection of European gas and electricity networks

On 19 May 2022, the Council and the European Parliament reached a preliminary agreement on a new gas storage regulationas previously proposed by the European Commission in March.

Thanks to these rules – which still need to be formally approved – the gas storage installations will be completed by next winter and will be able to be shared with Member States that do not have one of their own.

On 2 May 2022, at an extraordinary Council meeting, EU energy ministers discussed the energy situation in the EU in relation to suspension of gas supplies from Gazprom to a number of EU Member States. They discussed the EU’s preparedness in the event of a supply crisis and possible emergency and solidarity measures. During this meeting, Ministers reiterated their solidarity with Ukraine.

EU leaders agreed on the Versailles Declaration reduce the EU’s dependence on Russian fossil fuels as soon as possible† At the March European Council, they discussed measures to mitigate the impact of high energy prices and secure energy supply. They talked about:

  • opportunities for market measures
  • gas storage and joint procurement of gas
  • short-term measures to address the impact on citizens and businesses

EU energy ministers had already taken a position on the market situation at an extraordinary meeting on 28 February. Then they talked about:

  • assistance to Ukraine and synchronization of Ukraine’s electricity grid with the EU
  • state of energy supply, stocks and flows in the Member States
  • emergency market measures to secure supply
  • options to limit the effect of high prices

That synchronization of the electricity grid in Ukraine with the European network completed on 16 March 2022.

food markets

Russia’s military aggression against Ukraine has a direct effect on global food security and the affordability of the food

Thanks to that common agricultural policy (CAP), the EU has no major problems with the availability of food, feed and fertilizers. The EU is pretty much self-sufficient and the internal market should help absorb shocks. That way, the EU can food security for EU citizens guarantees and guaranteed income support for European farmers.

Nevertheless, reduced imports of maize, wheat, rapeseed and sunflower oil and flour from Ukraine have an impact on the EU, especially on feed prices and the food sector. In the context of high market prices and inflationary trends due to the war in Ukraine, affordability the biggest concern in the EU.

At the European Council on 23-24. June 2022, EU leaders stressed it Russia is solely responsible for the global food crisis. They called on Russia to stop immediately agricultural establishments as a target and to enable the export of Ukrainian grain.

By using food as a weapon in its war against Ukraine, Russia is solely responsible for the global food security crisis it has created.

European Council conclusions, 23 June 2022

EU leaders stressed that the EU is sanctioning Russia free movement of agricultural products and foodstuffs and enable the provision of humanitarian aid. They expressed their strong support for the work of solidarity corridors, which should facilitate the export of food from Ukraine through land and through EU ports. They also called for increased efforts to support developing countries in dealing with the consequences of the crisis.

On 20 June 2022, the Council adopted conclusions on response from Team Europe on global food insecurity. Ministers emphasized that:

  • Russia’s unprovoked and unjustified war of aggression against Ukraine catastrophic consequences has for the people of Ukraine but also worldwide
  • Russia’s war of aggression food security crisis has been drastically worsened
  • EU sanctions against Russia are specifically designed to prevent food and agricultural products does not to meet

The Council called on the Member States to work together to tackle global food insecurity through four lines of action:

  • solidarity throughout emergency aid and affordability support
  • stimulating sustainable productionresilience and transformation of food systems
  • facilitating Act by helping Ukraine to export agricultural products by various routes and by promoting global trade
  • Effective multilateralism and strong support for the key role played by the UN Global Crisis Response Group in coordinating global efforts

EU leaders also discussed food security and food affordability at the extraordinary European summit on 30-31 March. May 2022. De Strongly condemned Russia’s destruction and illegal appropriation of agricultural production in Ukraine and called on Russia to:

  • to end its attacks on transport infrastructure in Ukraine
  • to lift the blockade of Ukrainian ports on the Black Sea
  • to allow the export of food, in particular from Odessa

The European Council called on the Member States to speed up the Commission’s proposed “solidarity corridorsFacilitating food exports from Ukraine The European Council also called for a comprehensive global response to food security challenges.

In June 2022, following the conclusions of the European Council, EU Ministers for Agriculture and Fisheries called for effective international coordination to provide a global response to food security. They stressed that it is necessary for Ukrainians as well as for international markets that the stored grain comes out of Ukraine before next harvest.

The market effects of the war and the course of the food crisis have been on the agenda of EU agriculture ministers since the early days of the Russian invasion of Ukraine.

Mobility of people and goods

The invasion of Ukraine has a significant impact on all modes of transport mobility of persons and goods in the EU

The biggest problems are fuel supply and rising fuel prices as well as the logistical challenges associated with border crossing and airspace restrictions. In addition, the import of goods and the large influx of Ukrainian refugees to EU countries pose further operational challenges.

In connection with solidarity with the Ukrainian refugees Member States have taken a number of measures, such as the establishment of transport and information hubs at important border crossings and the facilitation of transport for humanitarian aid.

In June, EU transport ministers discussed the situation in Ukraine and its consequences. They fully supported the Commission’s initiatives in this area:

  • solidarity corridors“to optimize supply chains and controls between Ukraine and the EU and create new transport routes
  • an emergency plan to improve transport in times of crisis to make more robust

The different ways to remove obstacles and commitments made in the field of transport to cope with the consequences of the war in Ukraine.

The Council has approved a draft mandate on the basis of which the Commission may negotiate a agreement on the temporary liberalization of certain road freight activities between the EU and Ukraine and Moldova.

On April 8, 2022, Transport Ministers discussed one coordinated EU response impact on the transport sector. They discussed measures at national and EU level to improve cooperation between Member States and the EU. It was primarily about:

  • support for Ukraine
  • protection of workers in the transport sector
  • increased resilience in the transport sector

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