BRUSSELS, March 2: A top European Union official Wednesday expressed fears that the EU's wide-ranging sanctions on Russia will also have a negative impact on the bloc's economy and energy. "The sanctions will have an immediate impact on our economy. It is difficult to quantify this impact as the situation is unfolding fast. There are many unknowns," said European Commission Vice-President Valdis Dombrovskis who is also EU Commissioner for Trade as well as chairs the Commissioners' group on 'Economy that Works for People.'

"Growth will be affected. We will see an impact on energy prices and supply chains, including for raw materials," he told an informal video conference of EU economy and finance ministers this evening. Noting that the EU today agreed to exclude seven important Russian banks from the SWIFT system and banned the transactions of Russia's central bank and froze its assets, he said "confidence will be knocked. There will also be direct fiscal costs (for the EU)."

"But we are more exposed when it comes to energy. We expect gas and electricity prices to remain high this year. The overall impact on inflation and the economy is significant and is not expected to abate soon," he stated. "So we will be in a high price and high inflation environment longer than we originally thought," warned Dombrovskis. He added that the European Commission plans to present a report on the energy situation next week to address these issues.(KUNA)