Smart sanctions and how to diminish Europe’s dependency on Russian gas

Summary:

The ongoing suffering of the civilian population in Ukraine has led to calls for the EU, or individual Member States, to stop imports of Russian gas. The economic consequences of such a step would be very severe in the short run. But there is another way, more gradual, which would minimise economic disruptions. The EU should simply impose a special import tariff on Russian gas.

Such a move would of course be against World Trade Organisation rules. But under these special circumstances it can be justified with the exemption under WTO article XXI for national security. Moreover, Russia has long imposed an export tax of 30 percent on gas. The EU can claim that its import tariff merely compensates for this distortion.

A tariff could be implemented almost overnight. Given that it would be done at the EU level, it would provide a tangible sign that Member States can act together.

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