European Union leaders will attend a virtual Euro Summit today.
The meeting will focus on relieve EU dependence on Russian energy imports.
Earlier this month, the European Central Bank (ECB) accelerated the winddown of its stimulus program in response to rising energy and commodity prices caused by the Russia-Ukraine War. EU leaders have agreed to cut Russian natural gas imports by 66% by the end of 2022. In response, Russia announced that it would force EU states to pay for Russian gas and oil in rubles. This measure intends to drive up the ruble’s price, helping Russia blunt international sanctions and stimulate its economy.
Expect EU leaders to use the summit to justify energy import diversification and increases in renewable energy investment as the Russia-Ukraine War accelerates the bloc’s shift toward greater energy independence. Still, such a dramatic cut could spell continued inflationary pressure, potentially driving the ECB to hike interest rates in the last quarter of this year or the first of next. The EU is likely to increase energy and commodity imports from the US, Qatar and Nigeria in the coming decade as it seeks to wean itself off Russian commodities.
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Kyle is a Publisher and Analyst on the Analysis team. He specializes in foreign policy and human rights in Latin America and the Caribbean, with a particular focus on Mexico and Central America.