Paris -

Although the Russian war on Ukraine and military confrontations are taking place on Ukrainian soil, its black smoke, negative effects and disastrous economic repercussions have extended and will extend over a larger area to include all of Europe.

The old continent has great economic relations with Moscow, and obtains from it more than 40% of its natural gas and 25% of its oil.

On the other hand, Ukraine is historically known as the "food basket of Europe", as it is the fifth and fourth largest supplier of wheat and corn in the world, and it is also on the throne of supplying seed oils.

Serious consequences

With the Russian invasion entering its eighth day, French President Emmanuel Macron, whose country holds the European Union presidency, warned at the opening last Saturday of the International Agricultural Exhibition in the capital, that this war "will be prolonged and we must prepare for it" because its consequences will be dire for French agriculture and the European economy.

Economic strategists have warned of Russia's reaction to the "painful sanctions" imposed by Washington and its allies on Moscow, and warn that the European economy - which is striving to recover from the effects of the Corona virus - may this time be a prey in the mouth of the Russian bear and its attempt to retaliate against the sanctions. The European American that woke him up from his winter slumber and tightened the screws on him.

The researcher specializing in financial markets and economic expert Daniel Melhem says that the French economy will be greatly affected, because there is a large concentration of French companies in the Russian market, which have a large volume of investments, and therefore if they enter into the cycle of sanctions and counter-sanctions, French economic activity will be directly affected.

He added to Al Jazeera Net, "As for Europe, most of its countries depend heavily on the Russian market for gas imports and raw materials that enter the automobile industry, especially Germany, in addition to basic materials such as wheat and corn. In the absence of real alternatives to this market, negative results will appear on the inflation rates that It will reach a record level in Europe, and the European Central Bank will not be able to control it, and therefore we will enter a period of economic contraction, especially if the crisis prolongs."

Russia's trade deficit

In the same context, the latest statistics and figures obtained by Al Jazeera Net from the European Union Statistical Office "Eurostat" - with regard to the trade of European-Russian goods - show that Moscow is the third largest partner for the Union's imports (8% of the total imports from outside this bloc) and the fourth The largest partner of the Union's exports (4% of total exports from abroad) in 2018.

Automobiles, transportation equipment, chemicals, pharmaceuticals, cosmetics, textiles and electrical equipment dominate EU exports to Russia, which together account for 90% of these exports.

While primary commodities dominate the Union's imports from Moscow (72%), mainly energy, raw materials and grain.

The same figures show that between 2008 and 2018, the European Union faced a trade deficit with Russia, which reached its highest level in 2011 at 93 billion euros and the lowest level in 2016 at 46 billion (the euro is equal to approximately $1.09), and the deficit reached a record level of about 83 billion in 2018. The union exported 85 billion euros to Moscow and imported 168 billion euros from it.

At the level of the EU countries, Germany ranked first in the value of trade transactions in 2018, as it was the largest importer of goods from Russia with about 33 billion euros, and the largest exporter to it with about 26 billion, bringing its trade deficit with it to 7 billion.

resilience plan

Like the rest of the European countries, France has huge trade and economic exchanges in Russia, where it has more than 700 companies active in the Russian market, including large groups such as Total Energies, Auchan, Société générale.

It employs more than 170,000 workers, which will expose its activities and workers to great risks with the economic embargo and sanctions announced by the European Union and the United States against Russia.

France is the ninth largest supplier of agro-food products to Russia, with a value of 780 million euros annually, according to the French agro-industrial association "ENA".

Fearing a retaliatory reaction from the Russian side against European sanctions, Macron stressed - at the opening of the agricultural exhibition - that the Russian-Ukrainian war "will not be without consequences for the world of agriculture, and for our exports in key sectors" and indicated that the government is preparing a "resilience plan" to confront Economic consequences.

In this regard, Camille Al-Sari, an economist and professor of international economics at the Sorbonne University, explained that France is the first foreign investor in Russia with 700 companies and 170,000 workers on Russian soil.

He added to Al-Jazeera Net, "If Europe and America proceed to implement economic sanctions against Russia, the results will be catastrophic, for these workers and these companies, and they may collapse and bankrupt because financial transactions will become impossible and profits and transfers to France will be absent, and this was also confirmed by the German Minister of Finance when he said that there is a danger Big on German companies.

All-out economic war

After strong statements on Tuesday by French Finance Minister Bruno Le Maire to local media, in which he explained that Europe and its allies will launch a "comprehensive economic and financial war against Russia" and push "the Russian economy to collapse." The response came quickly on the same day from Dmitry Medvedev, deputy head of the Russian Security Council, who threatened to: "A real war" after the tightening of economic sanctions on his country, and he said in a tweet on Twitter, "Pay attention to what you say, gentlemen. Economic wars in human history have often turned into real wars."

The French minister concluded his speech by saying, "These sanctions will also affect the economies of European countries," but "Russia is the one that will suffer, not Europe."

stock collapse

The Russian invasion on its first day caused a major collapse in the stock markets of most European stock exchanges, as the Paris Stock Exchange lost 3.15%, Frankfurt 3.73%, London 2.45% and Milan 3.10%.

The European benchmark index fell by 3.48%.

While the Moscow Stock Exchange plunged more than 30%, and the Russian currency (the ruble) hit an all-time low against the dollar.

Despite some recovery in the indices on the second day of the war, stocks returned to decline in the following days with the recurrence of European-American sanctions on Moscow.

In this context, the professor of international economics at the Sorbonne University noted that the history of sanctions in such cases shows that the damages accrue to all parties.

In the current case, the balance may be tilted to Moscow's side, and in the event that it is completely excluded from the SWIFT system, it will be unable to pay its debts, which will harm many European companies, especially German, and the European stock markets could collapse at any moment.

This tense climate in the European stock markets has left a state of fear and uncertainty that threatens investment and growth in European economies as a result of the unsafe and discouraging environment for investment.

nuclear weapon

After the differences and fluctuations of positions between several countries - regarding the exclusion of the Russian bear from the Swift system - the European countries and their American ally decided to impose partial sanctions with regard to this banking mechanism, which is described as an "economic nuclear weapon" by choosing some Russian banks and financial institutions and excluding them from this What are the effects and consequences of this exclusion on European financial markets?

Melhem certainly answers that there is real opposition from Berlin and Washington regarding the issue of SWIFT sanctions, which will create major problems for European companies that enter into direct trade with Moscow, and German companies will bear much greater consequences and losses than their counterparts in the rest of European countries.

But the great danger comes from inflation, economic deflation and European monetary policy, and this may lead to collapses in the European Stock Exchange that may reach from 15 to 25%.

energy markets

In light of accelerating geopolitical tensions and rising energy prices from oil and gas, Europe finds itself between the jaws of moving forward in tightening sanctions against Russia, and between thinking about its economic interests and its needs for strategic materials that it imports from Moscow.

The energy card remains the last strategic weapon in the hands of Russian President Vladimir Putin to put economic pressure on Europe and its partners, given that his country is the first exporter of natural gas in the world, and the second oil producer with about 10% of global production.

In this context, the French energy giant "Total" announced that there is no immediate solution to replace imports from Russia in the European gas market, if they are stopped.

But this suggests that there will be a significant rise in heating and gas bills in the coming period, which is fueling fears about the spiral of wages and prices and social protests.

Al-Sari believes that the French and European citizens will not be able to bear this huge rise in energy prices, because they are now at the ceiling of what they can already bear, and any new rise could result in social unrest similar to what happened with the "yellow jackets" in France, which is at the gates of presidential elections.