London, (Parliament Politics Magazine) – European sanctions aiming at Russia could eventually hurt the European and worldwide economies. The pan-European Stoxx 600 index fell 2.5% by mid-morning, cutting some of its earlier losses. Banks and autos slid 5% to lead losses while oil and gas stocks jumped 3.8% as oil prices surged.
Last week, the continental benchmark lost 7% and suffered its worst week since March 2020, the onset of the coronavirus pandemic.
The US is currently amidst discussions with European officials aiming to resolve the situation affecting not only economically Europe but what also proves to be the biggest humanitarian crisis since WWII actively impacting some of the EU’s members.
European Union and the US government are skeptical and also leaning towards imposing a general ban on imports of Russian crude and natural gas. Of course, gas has already been rising on an upward scale since the beginning of the year. Such a move could hint at the possible risk of stagflation— a period of slow economic growth and high unemployment coupled with high inflation — for the global economy. According to CNBC “oil prices surged to their highest since 2008 in response to the news, before trimming gains slightly. International benchmark Brent crude was last seen up 4% to around $122.80 per barrel and U.S. crude was up 2% to around $118.24 per barrel.”
While Russia ramps up its assault it continues threatening Europe regarding cutting down access to its main pipeline to Germany. In the meantime, the EU gets about 40% of its gas and 30% of its oil from Russia and has no easy substitutes if supplies are disrupted.
President Zelensky has implored NATO to implement a no-fly zone on Ukraine, as yet to no avail. He has also submitted Ukraine’s candidacy to the European Union with utmost urgency. Shares in Asia-Pacific closed sharply lower on Monday, with Hong Kong’s Hang Seng index dropping almost 4% to lead to regional losses. On Wall Street, the major U.S. averages sank on fears of a global economic slowdown. The London Stock Exchange canceled trades on shares of Anglo-Russian miner Polymetal International over a 20-minute period on Monday morning following a sudden surge that sent the share price skyrocketing. Polymetal shares were up 32% by mid-morning.