The EU risks destroying its own economy with sanctions against Russia

The European Union has “shot itself in the lungs” and is risking destroying its own economy by maintaining sanctions against Russia over its invasion of Ukraine, the Hungarian prime minister has claimed.

Viktor Orban has urged the bloc to reconsider its strategy, arguing the punitive measures imposed by Brussels have done little to curb Moscow’s war effort.

“At first I thought we just shot each other in the foot, but now it’s clear that the European economy has shot its lungs and is gasping for air,” he told Hungarian public broadcaster. “The sanctions are not helping Ukraine, but they are bad for the European economy and if this continues, they will kill the European economy. What we are seeing now is unbearable.”

The EU yesterday introduced its seventh tranche of economic sanctions against Russia in the wake of its invasion of Ukraine, including embargoes on imports of Russian coal and oil in hopes of starving Vladimir Putin’s war machine of much-needed funds.

According to Didier Reynders, the EU’s Justice Commissioner, the bloc has frozen €13.8 billion in assets of Russian oligarchs and organizations since February 24.

Mr Orban, who is seen as Europe’s closest Putin ally, added: “The moment of truth must come in Brussels, when leaders admit they miscalculated, that sanctions policy was based on false assumptions and needs to be changed .”

Amid the conflict, economists at the European Commission have downgraded growth forecasts for the entire continent.

The EU executive warned that as the war progresses, the economic fallout “will worsen, revealing huge uncertainties in energy and grain supplies”.

Paolo Gentiloni, EU Economy Commissioner, said: “Russia’s unprovoked invasion of Ukraine continues to send shockwaves through the global economy.

“Moscow’s actions are disrupting energy and grain supplies, driving up prices and undermining confidence.”

Economic growth in Germany and France is expected to slow down this year and in 2023. Projected GDP growth for the EU remains at 2.7 percent this year but is expected to fall to 1.5 percent in 2023, compared to a previous forecast of 2.3 percent.

Inflation records of 8.6 percent last month are being driven by rising energy prices and fears that Berlin could slide into recession if Russia cuts gas supplies to Germany.

Meanwhile, the European Commission’s Legal Service has warned that the bloc may have to lift sanctions against a number of Russian individuals over fears the measures were imposed on weak grounds. Of the hundreds of tycoons sanctioned by Brussels, about 30 have taken the EU to court.

The Commission announced a “maintenance and alignment package” to underpin six existing waves of sanctions.

Ursula von der Leyen, President of the European Commission, said: “Russia’s brutal war against Ukraine continues unabated. We therefore propose that our tough EU sanctions against the Kremlin be tightened, enforced more effectively and extended. Moscow continues to pay a heavy price for its aggression.”

Telegraph Media Group Limited [2022] The EU risks destroying its own economy with sanctions against Russia

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