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Ukraine: war-related economic losses estimated at more than US$550 billion

(Photo: Getty Images)

This text brings together all the reactions since the invasion of Russia in Ukraine for the day of March 28, 2022. It will be updated during the day. To find all our coverage on the conflict, it’s here.

10:29 am | Kyiv — The Ukrainian government estimated on Monday the economic losses caused by the war with Russia at more than 550 billion US dollars, Ukrainian Economy Minister Yulia Sviridenko announced Monday on Facebook.

The minister put the figure at “564.9 billion US dollars, the direct impact of the destruction” since the start of the Russian invasion on February 24, to which are added “the indirect effects of the fighting” on the economy, in particular linked to the explosion of unemployment, to the sharp drop in household consumption or even to the drop in State revenue.

It is at the level of infrastructure that the losses are the most significant, indicated Ms Sviridenko, with “nearly 8,000 kilometers of damaged or destroyed roads”, as well as “dozens of stations, airports”, for an amount of 108.5 billion euros.

Ten million square meters of housing and 200,000 cars were destroyed in more than a month, she added.

Ms Sviridenko, also deputy prime minister, also estimated the drop in GDP in 2022 at 102 billion euros, i.e. an estimated contraction of more than 55% of the economy compared to 2021.

The Ukrainian state budget risks being cut by 43.8 billion euros, according to the Minister of the Economy, a drop of nearly 90% on the planned annual budget.

“Every day the numbers change, and unfortunately they increase,” Ms. Sviridenko lamented on her Facebook page.

“Thus, Ukraine (…) will demand financial compensation from the aggressor,” she added, “whether through court decisions or by transferring Russian assets directly to the state (currently) frozen in Ukraine”.

Pressure continues to mount to sanction Russian assets in Switzerland

10:20 am | Zurich — Pressure continues to mount in Switzerland to sanction Russian assets after a call from an adviser to the Ukrainian president, with the asset freeze finding broad support in Swiss opinion, according to a poll released on Monday.

A survey carried out by the Link Institute between March 17 and 21 shows that 57% of those questioned are in favor of freezing the assets of senior Russian dignitaries close to power, 26% believing that the sanctions in this area do not go far enough.

Some 56% are in favor of the idea of ​​cutting off Russian banks from the Swiss financial system, with 18% even believing that the sanctions should go further.

If 60% of Swiss nationals questioned think that the government has handled the situation well and 10% very well, 56% would be in favor of more severe sanctions even if this should lead to shortages of gas and oil in Switzerland, according to this survey carried out with 1,200 people.

In an interview published Sunday by the Swiss tabloid Blick, Alexander Rodnyansky, a close friend of the adviser to the Ukrainian president, called on Switzerland to do more.

“There is a lot of money from the Russian elite in Swiss banks. For us, it is vital that Switzerland supports the global pressure on Russia”, he declared in the columns of the newspaper.

The Swiss government has required banks to declare to the Ministry of the Economy the persons or entities targeted by sanctions among their customers, but according to Mr Rodnyansky, “this is not enough”.

“Switzerland must, like other states, actively seek out these assets. A large part of the Russian elite continues to act in the shadows. They hide their funds”, he insisted, believing that Switzerland must “intervene more firmly”.

Switzerland has so far frozen the equivalent of 5.75 billion Swiss francs (5.62 billion euros) in Russian assets since the invasion of Ukraine, a senior government official said last week. Ministry of the Economy, specifying that the amounts are still likely to increase as the information provided by the banks will reach it.

G7: Russian gas payment in rubles is ‘not acceptable’

8:48 | BERLIN — The G7 countries said on Monday that demanding payment in rubles for Russian gas is “not acceptable” and shows that Russian President Vladimir Putin has his “back to the wall”, the German economy minister said. Robert Habeck.

“All G7 ministers agreed that this was a unilateral and clear violation of existing contracts (…) which means that payment in rubles is not acceptable,” he said. said Mr. Habeck, after a virtual meeting with his G7 counterparts.

“I think this request should be interpreted as Putin’s back to the wall,” he added.

Vladimir Putin announced last week that Russia would no longer accept payments in dollars or euros for gas deliveries to the EU, giving Russian authorities a week to work out a new ruble settlement system.

“We ask the companies concerned not to respond to Putin’s request,” said Robert Habeck on Monday, calling Russia an “unreliable supplier”.

Through this requirement, “Putin’s attempt to divide us is obvious”, added the minister whose country is chairing the G7 this year (United States, France, Great Britain, Canada, Japan, Germany and Italy).

The Russian president explained that his decision was a reaction to the freezing of Russian assets decided by the West to sanction Moscow after the invasion of Ukraine.

Many of the European buyers of Russian gas – including Germany, Poland and even France – have denounced this request, believing that Russia was thereby violating its contracts with European companies buying gas.

Despite Moscow’s invasion of Ukraine, Russian gas continues to flow to the European Union, which refuses to impose an embargo, like the United States.

Some European countries, such as Germany, are indeed particularly dependent on this resource for their economy.

Berlin, which supplied more than 55% from Russia before the war, is seeking to quickly reduce its dependence by canvassing other producers, but does not envisage being able to do without Russian gas before mid-2024.

The German government will in particular accelerate the construction of LNG terminals with a view to importing liquefied gas.

An agreement was signed in mid-March with Qatar, a major exporter of LNG (liquefied natural gas), for a “long-term supply”, during a visit by Mr. Habeck to this Gulf country.

Heineken announces withdrawal from Russia

8:07 | The Hague — Dutch brewer Heineken (HEIA.AS, €88.26) announced on Monday that it would leave Russia, where it has 1,800 employees, because of the ongoing war in Ukraine which continues to intensify”.

Heineken’s business in Russia is “no longer viable in the current environment,” the world’s second-largest brewer said in a statement. “Therefore, we decided to leave Russia,” he adds.

“We are aiming for an orderly transfer of our business to a new owner in full compliance with international and local laws,” said Heineken, which announced on March 9 the cessation of production and sale of its brand of beer in Russia.

The brewer has stressed that it will not benefit from a transfer of ownership and expects the transaction to cost it 400 million euros due to the loss of value of this asset and other “exceptional charges”.

“We continue to hope that a path to a peaceful outcome emerges in the short term,” Heineken said.

The group has guaranteed payment of the salaries of its 1,800 employees in Russia until the end of 2022.

Founded in 19th century Amsterdam, Heineken produces and sells more than 300 brands of beer and cider, including Heineken, Strongbow and Amstel, and employs more than 85,000 people worldwide.

Hundreds of international companies and groups have in recent weeks announced certain pressures, the suspension of their activities in Russia or their gradual withdrawal from the country due to the invasion of Ukraine.

Last week, President Zelensky, in a message to the French Parliament, had urged French companies operating in Russia to stop supporting the Russian “war machine” and to leave this country, citing Renault, Auchan and Leroy Merlin.

Auchan, which employs 30,000 people in Russia, announced that it was maintaining its activities in the country, citing in particular the need to support the purchasing power of Russians.

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