By Jesús Aguado

MADRID (Reuters). – An eventual halt in Russian energy imports would cause a temporary economic downturn that could lead to a decline of gross domestic product across the European Union by as much as 2.5% to 4.2%. This was stated Tuesday by Spain’s central banking.

In an analysis report, the Bank of Spain stated that the impact of trade suspension in its first year should be lessened in subsequent years. This is due to Europe’s growing adaptability when replacing Russian imports.

According to the report the economic burden would be greater in Germany, Italy, and France, which are the biggest economies of the Euro area, as well in Eastern European countries that rely more heavily on Russian energy resources.

According to Javier Quintana (Bank of Spain research economist), Germany would see a drop in activity of 1.9%-3.4% of its GDP. It will also experience 2.3%-3.9% declines for Italy and France. There would also be a fall of 0.8%-1.4% in Spain.

Leaders of the European Union agreed to reduce oil imports by 90% from Russia on Monday.

Due to Germany’s high dependence on Russia for energy, this issue is being debated more in Germany.

The report projected an additional 0.8% to 1.2 percentage point for Spain.

Inflation in the Eurozone rose yet again to 8.1% year on year in May.

The projections are subject to immense geopolitical uncertainty and are based upon a hypothetical halt in all Russian energy commodity supplies.

It stated that the suspension of oil product imports would not have as much impact on inflows of Russian or coal.

Even though a possible halt to Russia’s remaining trade flows would impact European economies in a significant way, its effect would not be as severe as that of energy raw materials.