The call, held Jan. 25, riled European politicians and underscored the conflicting economic interests facing Europe as it now moves to punish Moscow with a barrage of sanctions for attacking Ukraine. A similar call set for next week with German business leaders, including those from the energy company Uniper and the supermarket chain Metro, was called off only on Thursday.
But with huge economic assets at stake, EU leaders have sought to walk a fine line in recent days over the scope of the sanctions, which fell short of the more sweeping economic clampdown that some supporters of Ukraine have demanded.
At one point during frenzied negotiations this week, Italy’s representatives sought to have goods produced by its luxury industry excluded from any sanctions package. They also argued for narrower sanctions that omit major crackdowns on Russian banks, as did Austria, whose Bank International maintains hundreds of branches in Russia, diplomats said.
More notable is the omission of sanctions that would harm Russian energy imports to Europe, in which a phalanx of influential energy companies from Paris to Berlin hold major interests. Nor did allies shut Russia’s economy from the global payment system known as SWIFT, which is used by banks in 200 countries, drawing condemnation from critics who said Europe’s leaders were putting economic interests above the human toll in Ukraine.
That is a comfort for European countries whose companies have huge corporate presence in Russia.
For France alone, 35 of the 40 biggest French companies listed on the country’s CAC 40 stock exchange have significant Russian investments, from supermarkets on the streets of Moscow, to the liquefied natural gas operations of the French energy giant TotalEnergies in the Peninsula, above the Arctic Circle. All but two of the 40 companies listed on the DAX index in Frankfurt have investments in Russia.
Around 700 French subsidiaries operate in Russia in a variety of industries employing over 200,000 workers, according to the French finance ministry.
While Le Mare pledged that the impact to the French economy from sanctions would be minimal, the hit to some French companies was far from clear.
Among the most exposed is the French automaker Renault, which has two factories in Russia and is the leading auto producer there through a partnership, which makes the most popular car in Russia. Russia is Renault’s second largest-market after France.
Last week, Luca de Meo, the company’s CEO, warned that worsening of tensions between Russia and Ukraine could lead “to another supply chain crisis” for the company.
That problem has already hit Volkswagen, which said Friday that it would suspend operations for several days next week at two factories in Eastern Germany that make electric vehicles because deliveries of crucial parts from western Ukraine have been interrupted by fighting.
Volkswagen could also be hurt by sanctions against Russia, where since 2009 it has had a factory that employs about 4,000 people producing its Tiguan and Polo models, as well as the Audi Q8 and Q9, and the Škoda Rapid. Mercedes-Benz has a factory outside of Moscow, while BMW works with a local partner. All three have invested in the Russian market and a growing cadre of consumers that can afford its cars.
You must be logged in to post a comment.