The European Commissioner for Financial Services, Financial Stability and Capital Markets Union, has said nothing is off the table when it comes to potential further action by the European Union on sanctions against Russia.
Mairead McGuinness said everything the EU does will be about attacking Russia’s war machine by “pulling away money” but while also addressing the humanitarian needs of the people of Ukraine.
She said existing sanctions are already unprecedented, particularly those that have targeted the freezing of the assets of Russia’s central bank, and they are working.
“So it has had an immediate impact, look at what has happened to the currency there and interest rates,” she told the media after she addressed a William Fry organised ESG & Sustainability seminar.
“Look also at what companies are doing, look at what sports organisations are doing,” she said.
Ms McGuinness said people are asking questions about whether Europe should continue to source energy from Russia.
She also acknowledged that Europe’s reliance on oil and gas from Russia is a vulnerability at any time, and a particular issue today.
But the commissioner also said the EU has to be mindful when making decisions about what the potential impact will be.
“We want to hit Russia, we don’t want to hit our own sectors, our own citizens, but it is also true to say there will be pain for all of us in Europe,” she claimed.
However, it is pain worth bearing because we are fighting for democracy and freedom, she added.
Asked if the EU might target crypto assets, Ms McGuinness said as she sees it, they are already covered by the existing sanctions.
But the issue, she added, is how you capture, monitor and implement it and the EU is working on some details.
She said there had been a heartening strength in the unity so far among member states over the sanctions which are very tough.
The speed at which member states are identifying oligarchs and assets that are very “visible and vulgar” has been noticeable, as is how people want the EU to do more.
Regarding the question of money held by Russian entities in special purpose vehicles registered in Ireland, Ms McGuinness said the EU’s concern is that sanctions are implemented in Ireland and across Europe to the letter of the law.
“That’s why central banks across Europe, banks across Europe, insurance companies, are looking at their client base and list and making sure those entities and those individuals who are sanctioned cannot take their money out of Europe,” she said.
She added that there has to be no grey area here.
Ms McGuinness said she would not be advising that companies here that have operations in Russia divest themselves of those assets or that there should be export controls on Russian firms operating here.
“I think businesses across Europe are looking at their supply lines, their businesses, their investments,” she said.
“What is very important is that we separate our sanctions work from other business activities and I’m sure boards and companies are looking at investments or indeed enterprises in Russia and they will make their own judgements on this.”
She added that it was important that Russian citizens are not targeted.
The EU commissioner said she is not at all overly concerned about the exposure of European financial institutions to Russia.
There will be economic impacts though, she said, on supply chains and energy prices, as well as availability.
As regards the impact on sectors of the economy across Europe, she said the energy issue would be considered by the college of Commissioners next week.
“There will be a deep discussion about the overall economic scenarios in this war situation and then sectoral impacts,” she predicted.
She said that given Ukraine’s central role as an exporter of grain, if there is no planting or reduced planting because of the war, then the consequences for supply, price, livestock feed and food prices would be very significant.
She added that Europe has to plan for something that will last much longer, in the event that peace talks do not work.