By acting together, the European Union can optimise its response to the energy crisis in all scenarios but each country will have to make concessions.
The EU lacks the coordination structure and transparent data necessary to most effectively navigate an embargo on Russian oil.
The idea of confiscating the Bank of Russia’s frozen reserves is attractive to some, but at this stage in the Ukraine conflict confiscation would be counterproductive and likely illegal.
Even at this late hour, the European Union should consider taking a different path.
A tariff on imports of Russian fossil fuels would allow Europe to hit Russia's energy sector without great suffering.
Letter published in Science.
A punitive tariff on all energy imports from Russia would be a better choice than a gradually phased-in embargo on selected fuels.
The 2 May meeting of EU energy ministers should deliver strong and common EU action. Failing to do so would undermine Europe’s unity, energy security and foreign policy.
As energy security risks increase, European governments must stop subsidising oil and gas, and ask people to consume less.
Policymakers must think coherently about the joint implications of their actions, from sanctions on Russia to subsidies and transfers to their own citizens, and avoid taking measures that contradict each other. This is what we try to do in this Policy Contribution, focusing on the macroeconomic aspects of relevance for Europe.
The most efficient way for Europe to sanction Russian energy would not be an embargo, but the introduction of an import tariff that can be used flexibly to control the degree of economic pressure on Russia.
The war in Ukraine has brought an end to a 60-year period in which Europe has enjoyed a peace dividend, an amount released by reducing defence expenditure to be invested in beneficial economic activities.