Diverging costs of Russian gas ban complicate EU sanctions push

European Union countries discussing tougher sanctions against the Kremlin would face vastly different economic outcomes if they opted for a complete cut-off in Russian energy supplies, according to a French research paper.

While the impact for France would be “modest,” with a decline of about 0.15% to 0.3% in gross national income, nations including Lithuania, Bulgaria, Slovakia, Finland and the Czech Republic could experience drops of as much as 5%, projections by the Conseil d’Analyse Economique released on Monday showed.

Germany, the continent’s largest economy, faces an “overall moderate” impact that could reach 3% in the most-pessimistic scenario, according to the report.

The diverging risks may make it harder to attain the EU unanimity needed to hit Russia with stiffer penalties—a move some member-states want in response to reports of war crimes in Ukraine. Others, including Germany, are opposed to sanctioning Russia’s energy industry, as well as its maritime trade and other key industries.

The Conseil d’Analyse Economique, a non-partisan research center that answers to France’s prime minister, said the EU could limit the economic impact for its members by opting for high tariffs on Russian fossil fuels instead of a total embargo. According to the paper, a 40% levy would reduce the quantities imported by about 80% while dividing by around three or four the economic losses for the most-vulnerable countries.

The research took into account the cascading effects along production value chains in a model with 30 sectors and 40 nations. While the authors acknowledged some imprecision, they said the orders of magnitude are “very robust.”