French energy companies are operating in Russia. There are luxury boutiques near Red Square. The Russian south has German auto factories.
European companies are bracing for the possibility that the sanctions against Russia may hurt them too.
Bruno Le Mai, the French finance minister, said that the sanctions were drawn up to maximize pain to the Russian economy while sparing the European Union.
Thousands of foreign companies that have done business in Russia for years are bracing for an inevitable economic blowback, and war in Ukraine threatens to disrupt supply chains and drag down Europe's economy just as it was starting to recover from the lashing of Covids.
Christian Bruch, the chief executive of Germany-basedSiemens Energy, said this week that the attack on Ukraine represents a turning point in Europe.
37 percent of Russia's global trade in 2020 will be with the European Union. About 70% of Russian gas exports go to Europe, and half of Russian oil exports go to Europe.
For decades it has been a key destination for European companies in a range of industries, including finance, agriculture and food, energy, automotive, and luxury goods.
Some European companies have had business relations with Russia for a long time. Since the late 19th century, the giant conglomerate that is the parent company ofSiemens Energy has been doing business there. Economic ties were seen as a way to maintain relations during the Cold War.
After the fall of the Soviet Union, Western companies came to Russia to cater to a growing middle class, or to sell cars to wealthy Russians. Other wanted to buy Russian titanium for airplanes.
While some multinational companies, such asDeutsche Bank, stopped doing business in Russia after the annexation of the peninsula, others have worked hard to grow their market share in recent years.
A group of top executives from Italy arranged a video call with Mr. Putin to discuss economic ties while European leaders were discussing sanctions.
The chiefs of UniCredit bank, the Pirelli tire company, the state-owned utility Enel and others listened for over half an hour as Mr. Putin talked up Italian business investments and opportunities in Russia.
European politicians were riled by the call, which underscored the conflicting economic interests facing Europe as it now moves to punish Moscow with a barrage of sanctions for attacking Ukraine. The call for German business leaders, including those from the energy company Uniper and the supermarket chain Metro, was called off on Thursday.
With huge economic assets at stake, European Union leaders have sought to walk a fine line in recent days over the scope of the sanctions, which fell short of what some supporters of Ukraine wanted.
During frenzied negotiations this week, Italy's representatives sought to have goods produced by its luxury industry excluded from any sanctions package. Austria's Raiffeisen Bank International has hundreds of branches in Russia, and they argued for narrower sanctions that did not include the Russian banks.
The omission of sanctions that would harm Russian energy imports to Europe is notable. Critics said Europe's leaders were putting economic interests above the human toll on Ukraine by not shutting Russia's economy from the global payment system.
European countries with large corporate presence in Russia are reassured.
35 of the 40 biggest French companies listed on the country's CAC 40 stock exchange have significant Russian investments, from TotalEnergies in the Yamal Peninsula to the supermarket chain Auchan on the streets of Moscow. All but two of the 40 companies on the DAX index have investments in Russia.
According to the French finance ministry, over 200,000 workers are employed by 700 French subsidiaries in Russia.
Mr. Le Maire promised that the impact on the French economy from sanctions would be minimal, but the hit to some French companies was not clear.
There is a rising concern. Russia's attack on Ukraine could cause spikes in energy and food prices. Some countries and industries would suffer severe economic damage from supply disruptions and economic sanctions.
The price of energy. As the conflict has intensified, oil prices have risen to their highest level in more than two years. One of every 10 barrels the global economy consumes is supplied by Russia.
There is gas supplies. Europe gets nearly 40 percent of its natural gas from Russia, and it is likely to be walloped with higher heating bills. European leaders accuse Russia of reducing supplies to gain a political edge, as natural gas reserves are running low.
There are shortages of essential metals. Russia is the world's largest exporter of the metal and the price of it has gone up as a result. The price of nickel has gone up.
Financial turmoil. Sanctions designed to restrict Russia's access to foreign capital and limit its ability to process payments in dollars, euros and other currencies are expected to have an effect on global banks. Russia is also on alert for cyberattacks.
The Lada, the most popular car in Russia, is made by a partnership between Avtovaz and the French automaker, which has two factories in Russia. Russia is the second largest market for the company.
Luca de Meo, the company's chief executive, warned last week of another supply chain crisis if tensions between Russia and Ukraine get worse.
Volkswagen said Friday that it would suspend operations for several days next week at two factories in Eastern Germany that make electric vehicles because of the fighting in western Ukraine.
Since 2009, Volkswagen has had a factory in Kaluga that employs 4,000 people to make the Polo and Tiguan models, as well as the Q8 and Q9 models. BMW works with a local partner, while Mercedes-Benz has a factory outside of Moscow. The Russian market has been invested in by all three of them.
Volkswagen said the impact on its business in Russia would be determined by a crisis team.
If the framework conditions change, we will evaluate them and decide how to deal with them.
There are banks.
Italy's UniCredit, Austria's Raiffeisen Bank, and France's Soci are some of the banks that have ties to Russia. At the end of last year, Italian and French banks had outstanding claims in Russia of around $25 billion.
France, Italy and Germany were the main European powers trying to keep Russia in the global payment system. It would be hard for European countries to get money from Russian sources or pay for Russian gas if Russia were to leave.
European officials acknowledged that the situation would probably get worse before it gets better.
Robert Habeck, the German economy minister, said Thursday that it would not be possible to prevent sectors of the German economy from being affected.
He said that the price of making peace or returning to the diplomatic table is that we make the economic sanctions bite.
Liz Alderman was in Paris and Melissa Eddy was in Berlin.
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