Dr. Kieran McQuinn:

On the implications of the measures Russia could take in countering us or responding to the sanctions that have been imposed on it, energy is the obvious issue. Russia has already been making noises about reducing the energy supply. It is even cutting off completely the gas that is supplied, particularly to Europe. We know that Europe in general has a high dependency on Russian gas. Germany, in particular, has a very high dependency since approximately 40% of its gas comes from Russia. That is a very high dependency and there is a significant threat from the Russians to cut off energy. However, it is worth bearing in mind that gas and oil are probably the only two commodities that Russia is now trading with the rest of the world and are certainly the two main ones. They are worth a huge sum or value of cash to the Russian economy every day. Europe, in general, is paying somewhere in the region of almost €1 billion a day to the Russians in payments for gas and oil. In fact, our energy consumption of gas and oil has increased over the past week or so. We have been paying more for gas and oil to Russia than previously. That is one of the elements.

Whether the Russians would carry through on a threat to limit supplies of gas and oil to Europe is a vexed question. However, there is growing discussion about the possibility of Europe pulling the plug on supplies of gas and oil. Again, to date, it has been very reluctant to do so but we have seen the actions of the US authorities in banning imports of Russian oil, while the UK has said it will cease all imports of Russian oil by the end of the year. At a European level, one suspects that the clamour for this action will possibly grow in the weeks and months ahead, especially if the humanitarian situation in Ukraine deteriorates because it is ultimately the one last and most severe economic sanction the West can undertake.

Whichever way it comes, whether Europe decides to stop or change its imports of gas or the Russians decide to pull the plug, it is fair to say there will probably be a significant transformation in European energy use, certainly over the next year or two, in terms of what ensues from this crisis. That will bring major challenges - there is no other way to say it - and possibly quite substantial increases in energy costs in the short term as we try to adapt. As I said, quite a lot of work has already been done by various European agencies in looking at the challenges that would bring in respect of how quickly we could bring in liquid gas as a potential substitute, or even again looking at the possibility of nuclear power etc. These questions are all being teased out and discussed at this time.

Our trade with Russia is quite limited although, and Dr. O'Toole is in a good position to comment as he has been looking at this, in certain key sectors of the economy the quantity of goods we import from Russia is quite high. Dr. O'Toole will possibly be able to talk about that. On sector specifics, we have heard a lot of talk about aircraft leasing and Irish companies trying to get hold of aircraft they leased in the Russian market. Other headline companies have quite significant plants and possibly exposures in the Russian economy. Some of those have already been mentioned in the public domain; I do not think I am mentioning anything that others have not. The likes of Kerry Group and CRH have a substantial presence in the Russian market. It is probably too early to tease out exactly what the implications are in respect of those issues. While our direct exposure is quite limited, there is no doubt that the fact Russia supplies so much energy and agricultural produce to western markets means this will certainly have a general impact on producer prices, cereal prices and grain and food prices here.

As I stated, the impact from the energy component alone will be substantial in terms of the pressures it will bring on household incomes. Dr. O'Toole may wish to come in on the fact that certain sectors do quite a lot of importing from the Russian market.