Russia launched an invasion of Ukraine on Thursday morning, with explosions heard in the Ukrainian capital, Kyiv. 

French President Emmanuel Macron condemned the invasion and called for an immediate halt to military operations.

In the build up to the invasion, France and the EU slapped economic sanctions on Russia, cutting some trade relations with the country. 

The French government has insisted that this will not hurt the French economy, with Economy Minister Bruno Le Maire telling the Senate on Tuesday that the French economy is only a “little exposed” to events in Ukraine. 

“Russia is not a major nation for France. The impact on the French economy will be limited,” he said. 

The GDP of Russia is smaller than that of Italy and France does not have a significant trading relationship with the country. 

“France exports less than €7 billion worth of goods per year [about 1 percent of all exports] to Russia,” said Le Maire, adding, “we import less than €10 billion euros per year from Russia – that is less than 2 percent of French imports.”

“I want to be very clear – we have a battery of sanctions that are much more penalising if Vladimir Putin persists in violating the law.”

While the stock market is based largely on informed speculation and not always a reliable indicator of things to come, it is worth noting that the CAC 40, the Paris-base stock index, had plunged by close to 5 percent by on Thursday in response to the invasion. 

Energy costs 

The main concern however stems from a potential rise in energy costs, with France importing about 20 percent of its gas from Russia.  

On the global market, gas prices shot up by about 10 percent on Tuesday, over concern about supply problems linked to the invasion of Ukraine. 

Speaking to BFMTV on Wednesday, Le Maire said that France could maintain its current freeze on gas and electricity prices if necessary. 

“The freeze on gas prices is set to run until the Summer of 2022. If we need to prolong it because we see an explosion in prices, it seems to me indispensable to do so.” 

The economy minister said that the invasion provided further proof that France needs to diversify its energy supply. 

As far as petrol is concerned, Le Maire cautioned, “we don’t know what Vladimir Putin’s decision will be and how high the barrel price will go.” 

The signs suggest that car drivers in France will likely suffer because of the conflict, with petrol prices already topping €1.70 per litre. 

Food prices 

Ukraine has traditionally been referred to as the breadbasket of Europe, due to its status as a major wheat producer. 

Fears over a Russian invasion, which have proved well-founded, have led the price of wheat to soar – this inflation will likely trickle down to supermarket store prices soon.  

The price of wheat smashed its previous record high in European trading on Thursday, reaching €344 per tonne, far above its previous record of 313.5 euros recorded late last year. 

Farmers in France are also particularly worried about retaliatory sanctions from Russia which would see French exports banned. 

In 2014, when Russia annexed Crimea, Putin responded to western sanctions by banning the import of EU agricultural products, which hurt the French dairy sector in particular. 

The head FNSEA, a French agricultural union, said that French agricultural exports to Russia have never fully recovered.

French businesses in Ukraine and Russia  

French media report that there are some 160 French businesses operating in Ukraine. It is unlikely that these will continue to function if the country descends into all out war. 

The French government has asked for French foreign residents of Ukraine to leave the country. 

Meanwhile in Russia, the presence of French businesses means that France is the second biggest source of foreign direct investment in the country. 

35 out of France’s 40 biggest businesses have branches in Russia, employing around 160,000 people. 

Renault and Leroy Merlin are both market leaders in the country.

In previous periods of tension between the West and Russia, French businesses have continued to thrive in Russia.