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UKRAINE

How life in France could be impacted by the Russian invasion of Ukraine

The Russian invasion of Ukraine that began on Thursday could impact the French economy especially when it comes to fuel and energy prices.

Black smoke rises from a military airport near Kyiv
The full extent of the economic consequences of the invasion of Ukraine for France are unclear. (Photo by Aris Messinis / AFP)

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. 

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FOOD & DRINK

7 tips to keep your grocery shopping in France affordable

With rising inflation and cost of living, many people in France are desperate to keep their grocery bill low. Here are a few tips for how to avoid paying too much for food, drink and other everyday items.

7 tips to keep your grocery shopping in France affordable

With inflation ticking upward, we’ve seen prices rise, especially for things like fresh vegetables, meat, pasta and cooking oil. Even though inflation is affecting food prices less than energy prices, buying groceries is still a huge part of every household’s budget, and unfortunately things are set to keep getting more pricey. 

We’ve put together a list of a few ways you can save a few euro at the supermarket:

Figure out if you qualify for any government benefits

First things first, it is worth seeing whether you can qualify for any existing government assistance, like CAF. On top of this, the French government has promised to set up a food voucher of €50 per month for low-income households after the parliamentary elections in June. 

READ MORE: EXPLAINED: How to receive CAF payments in France

Compare store prices

Unfortunately, going to the closest supermarket is not always the most economical solution. If you prioritise grocery stores on the lower end of the price spectrum (and you’re willing to walk a bit further) you can save a lot of money. A helpful tool to find the cheapest store near you is the “Que Choisir” online interactive map (click here) that has listed 4,000 affordable stores in mainland France. 

Discount grocery stores, like Lidl and Aldi, are great options for saving a little extra at checkout. But if you must go to a pricier chain, like Monoprix for instance, try to buy Monoprix brand items – they’re typically a little less expensive than name brand foods.

Plan ahead to make the most out of discounts

If you go online ahead of heading to the grocery store, you can see which items will be discounted (“promotion”). If you cannot find this information online, you can always go to the store and ask for a catalogue of that week’s sales items.

Normally, this is something the cashier should have access to. With these discounts in mind, you can construct more affordable recipes. 

Franprix’s website, the ‘discounts’ page

Also, if you’re looking for cheaper recipes in general, you can always go to blogs and online recipe sites specialised in frugal shopping. If you want to try some French specific sites, you can test out “https://www.marmiton.org/” or “https://1repas1euro.com/recettes/

When it comes to discounts though, be careful about conditions involved (particularly when it comes to loyalty cards).

Sometimes these promotions promise a lot, but actually getting your money back might not be as simple as slashing a few cents at the checkout – you might need to send the coupon somewhere to get the discount, or wait for points to accumulate on your card.

That being said, you can optimise your discounts using several online sites that allow you to combine your loyalty cards (Fidme, Fidall, and Stocard). Other online coupon sites include Groupon, which allows you to make grouped purchases (therefore cheaper), and Coupon Network and Shopmium, which help you benefit from existing discounts. For cashback plans, you can look to websites such as Shopmium, iGraal, FidMarques and Quoty, which allow you to be reimbursed for a part of your expenses.

Make a list, set a budget… and stick to it

It might seem obvious, but when you go into the store, try to resist temptation. The best way to do this is to keep track (in real time) how much you are spending.

Some stores make this easier by allowing you to carry around a ‘self-scanner,’ this will help you to watch your bill go up as you shop. Another tip for this is to withdraw the exact amount of cash you expect to need for the essentials of your trip – obviously in order to do this, you’ll need to know the base prices of your essential items, so it will require a bit of planning ahead.

Buy (then freeze) soon-to-expire products

A consumer’s best friend and sure-fire way to decrease waste! Items coming up on their use-by-date tend to be discounted, so if you plan to purchase these foods and then immediately freeze them, you can significantly extend their shelf life.

Lots of supermarkets make this easier for you by dedicating entire shelves to “short shelf life” items that, according to Elodie Toustou, the head of the “Money” section of the magazine 60 Millions de consommateurs, opting for these foods will allow you to “pay three to four times less.”

Another great way to do this is to use applications like “Phénix” and “Too Good to Go.” These applications will allow you to set your geographic parameter and then click on food stores, restaurants, and bakeries in your area that are getting rid of “panniers” (sacks) of soon-to-be-expired foods. Lots of times these panniers cost only a couple euros.

The trick here is to plan ahead by arriving at the start of the allotted time (if the boulangerie on your corner is offering “Too Good To Go” bags from 11am to 2pm, try to get there as close to 11am as possible for the best items).

Re-consider markets and farmer’s stores

Contrary to popular belief, buying from farmers’ markets and grocers that sell predominantly local products actually can save you money, particularly if you are buying the seasonally relevant fruits and vegetables. Buying directly from a producer can also allow you to eliminate the margin taken by intermediaries. But be careful, this rule is not true all the time.

One way to benefit from cheaper prices at markets is to arrive as late as possible, when the merchants have started to pack up their products. This might allow you to benefit from lower prices or even free items, as they’ll be hoping to get rid of their remaining items.

Know what items are most impacted by inflation

Finally, as inflation continues to increase, try your best to monitor which foods are most impacted. If possible, it might be worth removing or limiting them from your diet – or looking for more affordable alternatives.

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