War in Ukraine, billions in losses for EU companies

The war in Ukraine resulted in a terrible domino effect which has affected the most varied areas on a global level: military, social, political, food, energy and economic. Precisely as regards the economy, the effects are also reverberated in Europe, bringing thousands of companies to their knees. Especially those that did business with Russia.

Russia, USA and China: all against all in Asia. What happen.

Millionaire losses: how much is the red of European companies worth

According to Financial Timesthe direct losses of European companies in the Russian market amount to at least 100 billion euros since the start of the war in Ukraine. The investigation by the English newspaper examined the annual reports and financial statements relating to 2023 of 600 groups with registered office in the EU. As many as 176 businesses “recorded asset write-downs, higher-than-normal foreign exchange charges and other one-off expenses following the sale, closure or reduction of Russian operations,” the report said. In other words: companies from the Old Continent have paid the price and unexpected costs resulting from the sale or closure, even partial, of its activities in Russia.

However, the experts' calculation does not include the indirect macroeconomic impacts of the Russian-Ukrainian conflict, such as the increase in energy and raw material costs. The sectors with the greatest devaluations and charges are: oil and gas groupswhere alone BP, Shell and TotalEnergies reported combined charges for 40.6 billion euros. However, the huge losses are offset by huge aggregate profits due to rising oil and gas prices. The red of industrial companies, including car manufacturers, can be quantified as 13.6 billion euros. Financial companies, including banks, insurance companies and investment firms, registered instead 17.5 billion euros of write-downs and other charges.

Meanwhile, Chinese banks are “eating” Russia: the move that changes everything.

It's Italy?

As regards Italian accounts only, the data is provided by the ICE Agency (Agency for the promotion abroad and the internationalization of Italian companies). Before the upheaval of the invasion of Ukraine, they were around 300 local companies who did business with Russian companies and entities. A system which, in 2021 alone, guaranteed a turnover of over 4 billion euros.

Our country was responsible forexports of more than 7 billion euros of products to the Russian Federation. The boximport marked an almost double bill: 12.6 billion euros, with the first two purchase items established in gas and raw materials. Then follow the cereals: Italy imports around 120 million kilos of grain from Ukraine and another 100 million from Russia. The stop of previous exchanges between Rome and Moscow also had other serious implications: until the end of 2021, Russia was in fact the second nation for shopping in our country, with 13% of purchases on the national total. A “treasure” dissipated and now close to zero.

How much money did Western countries send to Ukraine?

In addition to losses and unexpected expenses, European and American companies have seen a gigantic amount of goods and money sent to Ukrainian institutions. Despite the feared (and repeatedly announced) reduction in military assistance to Kiev's defense, due to the wheat dispute with Poland (we talked about it here) and national debt disputes in the United States, the flow of aid has not stopped.

The total volume of military, humanitarian and financial assistance from February 2022 to September 2023 it was $322.8 billion. The first three “benefactor” countries (a highly inappropriate word, given the resulting turnover) for the Ukrainian Armed Forces, as expected, were obviously the USA (with 106.8 billion), followed by Germany (23.1 billion) and from United Kingdom (15.2 billion). The calculation does not include costs incurred for refugees, which brings the virtual total to a much higher figure.