Putin offers view on why EU states have no economic growth

The economic hardships of EU member states primarily come down to Brussels’ decision to forgo Russian oil and gas imports, President Vladimir Putin told the ‘Russian Energy Week’ forum on Wednesday. The bloc has only foiled its economic growth while Moscow reoriented itself to the Asian markets, he added.

EU nations are “currently overpaying for their oil and gas supplies,” Putin said, adding that the EU’s economy is demonstrating “nearly zero” growth as a result. In September, the European Commission said in its economic forecast that the bloc’s economic growth had been revised to just 0.8% in 2023 from the initially projected 1%. The growth forecast for 2024 was also changed from 1.7% to 1.4%.

Russia’s energy products had “ensured economic and social well-being of the European Union for many years,” the president said, adding that the EU nations had decided to just forgo them by introducing restrictions on bank services and price ceilings on Russia’s oil and gas.

Putin pointed to the global balance of supply and demand in the energy sector, adding that if someone decides not to buy energy from a particular nation, they would have to buy it elsewhere, often at a higher price. “One has to be absolutely dumb not to understand this,” he said.

The Russian president also said industrial manufacturing and energy production in the EU had declined since at least spring 2023. In May, the EU statistical agency, Eurostat, said that production in the euro area’s construction sector fell by 2.4% and declined by 1.9% in the whole EU between March and February.

Moscow has, meanwhile, reoriented its energy industries to the Asian markets, the president said. “The Russian fuel and energy industries are working in a stable manner,” he told the forum, adding that Russian oil is now flowing to the “rapidly growing and broadening markets” of the Global South and East.

The president said the situation translates into the real disposable household income of people in Russia and the EU. Europeans have to deal with rising prices and lower real income, while Russians saw their real income rise on average by 4.4% between the first quarter of 2022 and the first quarter of 2023, he said.

“This is an indicator of the quality of economic policy,” Putin said, adding that the actions of the EU politicians look “surprising” to him. “Yet, it is their choice,” the president said.