Russia’s economy is barely growing, inflation is rising fast, and capital is pouring out of the country, the Economy Ministry said yesterday, a sign that international tensions around Ukraine are already inflicting severe economic costs.

Russia’s government has acknowledged for the first time that the economy is in crisis, undermining earlier attempts by officials to suggest weakening growth could weather sanctions over Ukraine.

Italy’s fractious ruling coalition struggled to bridge differences over a housing tax that threatens to create a new crisis for a government already severely strained by the legal turmoil surrounding Silvio Berlusconi.

Spain’s troubled banks could need as much as €62bn in new capital, independent auditors have calculated.

Poland has arranged for seaborne deliveries to help boost its oil supply after Russia cut off deliveries via the Druzhba pipeline amid a row with Belarus, Polish officials said today.