France says sanctions will cause ‘collapse’ of Russian economy

France said on Tuesday that Western sanctions against Moscow over its invasion of Ukraine will cause the Russian economy to collapse.

“We will bring about the collapse of the Russian economy,” Finance Minister Bruno Le Maire told the Franceinfo broadcaster a day after France, the EU and others said they would impose a new round of sanctions on Russia.

“The economic and financial balance of power is totally in favour of the European Union which is in the process of discovering its own economic power,” he said.

“We are waging total economic and financial war on Russia,” he said.

On Monday, the EU added top Kremlin-linked oligarchs and Russian President Vladimir Putin’s spokesman to its sanctions blacklist.

Among the high-profile names were close Putin allies Igor Sechin, head of state oil giant Rosneft, and Nikolay Tokarev, boss of pipeline mammoth Transneft.

Three men ranked within Russia’s 10 top richest by Forbes were also added: metals magnate Alexei Mordashov, tycoon Alisher Usmanov, and businessman and Putin friend Gennady Timchenko.

Le Maire said the total amount of Russian assets being frozen amounted to “almost 1,000 billion dollars”.

After the Russian central bank raised its key interest rate to 20 percent on Monday, “companies can only borrow at high rates”, Le Maire said.

Le Maire acknowledged that ordinary Russians would also suffer from the impact of the sanctions, “but we don’t know how we can handle this differently”.

Le Maire said he would talk to France’s two energy giants TotalEnergies and Engie in the coming days to decide on their involvement in Russian energy projects.

There was now “a problem of principle” with any collaboration with people close to Putin, Le Maire said.

His remarks, which came after other energy majors including Shell and BP announced that they would pull out of Russia, cause Engie’s share price to slump by five percent in early Paris bourse trading Tuesday.

Engie is notably involved in Russia’s pipeline project Nord Stream 2, which Germany last week put on hold when Moscow recognised two Ukrainian breakaway republics.

An aide to French President Emmanuel Macron also told reporters Monday that the imposition of new sanctions, which are to “raise the cost” of Putin’s war, was “a priority”.