The effects of the war in Ukraine on the European economy cannot be quantified yet, but it is clear that estimates of economic growth, both in the EU and in Romania, need to be revised downwards, European Commissioner for Economic Affairs Paolo Gentiloni said on Tuesday, while in Bucharest at a conference organized by The Economist.

At the same time, CFA Romania analysts reduced their expectations for economic growth for this year by almost one percentage point to 3.5%, and against the background of Russia’s war in Ukraine, the macroeconomic confidence indicator fell significantly in February.

“We are not far from the border, bombs continue to fall, we look forward to talks in Istanbul, but now civilians continue to be killed and thousands of Ukrainians continue to flee for their safety in several countries, including Romania. This is not just an attack on Ukraine, but an attack on the values we hold dear: democracy, freedom and the rule of law,” the European commissioner said, according to Agerpres.

The war will inevitably have an impact on the European economy and will exacerbate the challenges it faces anyway: rising energy and commodity prices, which puts pressure on consumer prices.

“In February, inflation rose to 6.2% in the EU and 7.9% in Romania. We expect the value of these indicators to continue to rise. The disruption of supply chains and the high degree of uncertainty affect confidence, which could influence estimates we have now. Member States will be affected differently, depending on their exposure to Russian gas or the very high flow of refugees. Romania, for example, is less dependent on Russian gas, unlike other European countries, but has already received more than half a million refugees, almost 600,000, with an extraordinary effort of solidarity,” he said.

It is still too early to estimate the effect of the Ukrainian war on the European Union’s economy.

“But it is clear that the estimate of economic growth of 4% that we have for this year, and of 4.2% for Romania, will have to be revised downwards. By how much? It depends on the evolution of the war and our common policy of to answer,” he added.

The Commissioner pointed out that the National Recovery and Resilience Plan is very important for the economic recovery in several countries, including Romania. If Romania continues its plan, it can increase its GDP by 2-3%.

The war in Ukraine is a wake-up call for Europe to strengthen its strategic sectors such as energy and defense. The intention is to reduce gas imports from Russia by two-thirds by the end of this year.

“The most important thing is to make sure that the price of energy remains bearable. We encourage the Member States to take steps to reduce the impact of these increases. Secondly, we need to make sure that we have enough gas in storage, because otherwise we’d have less gas in storage than in the previous year, and to diversify our gas suppliers, to find alternatives to Russian gas,” Gentiloni said.

The key in the long run is to stop dependence on fossil fuels, the European official added.