War in Ukraine: Threat of gas cut wall Germany, which takes risk

April 27, 2022

Robert

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Fulfilling a repeated threat as it received new economic sanctions from the West, Russia suspended gas supplies to Poland and Bulgaria.

The measure was one of the most feared by the European Union, which has gas as its second main energy matrix and imports from Russia. more than 40% consumption of that fuel.

Russian energy company Gazprom’s justification is that countries were not complying with the new requirement to pay for imports in rubles – the measure, applied after sanctions that restricted Russian presence in the international financial system, gave Moscow’s currency a boost.

European Commission President Ursula von der Leyen said the gas cut was “unjustified and unacceptable” and accused Vladimir Putin’s government of using the fuel as “an instrument of blackmail”.

The fear of a drastic reaction from Russia in relation to gas has caused European countries to slam on the brakes on sanctions – compared to those applied by the US -, even though their measures have been considered harsh.

While the Biden administration banned Moscow’s oil and gas imports as the invasion of Ukraine completed 13 days, the European Union made its first energy embargo a month later, against Russian coal.

Imposing punishments on Russia is an especially difficult task for Germany. Before the war, Russia provided 55% of the gas consumed in the country — which Olaf Scholz’s government says has reduced to 40% as a result of efforts to reduce this dependence.

An eventual cut in the supply of Russian fuel would lead the country into a recession in 2023, according to the forecasts of six German economic institutes:

2.2% would be the drop in GDP in 2023;
220 billion euros would be the accumulated loss in 2022 and 2023, equivalent to 6.5% of the country’s annual wealth.

But in the face of a war that has lasted 63 days, with thousands dead and with no sign of an imminent end, the economic risk seems no longer enough to contain Germany’s engagement against one of its main partners.

An example of this is the decision of the Scholz government to supply armored vehicles to Ukraine, which breaks with its historical position of not exporting weapons to countries in conflict.

But what explains the German turn?

for the columnist Sheet Mathias Alencastro, a researcher at Cebrap and professor of international relations at UFABC, Germany’s step had already been rehearsed since the beginning of the war, when in a speech Chancellor Olaf Scholz spoke of a “change of course” in its relations with Russia.

According to him, the war exposed the need to review the energy arrangement between Berlin and Moscow maintained for decades by the management of former Chancellor Angela Merkel and her predecessor, Gerard Schröder – who is now on the board of Gazprom.

Alencastro sees a big risk to the German economy, but probably calculated. “It seems that Germany is prepared. It took a step knowing that it is entering a phase of the conflict that would have a direct cost to the German economy and would be a burden on the population”, he assesses.

Researcher Laerte Apolinário Júnior, professor of international relations at PUC-SP, also attributes the turn to internal and external pressures for the country to take a firmer position:

External plane: The US has applied very tough measures against Russia and pressured its allies to follow suit. At the same time, President Volodymyr Zelensky is also demanding more help from countries and NATO;
Inner plane: involves German public opinion, the parties that make up the government coalition (in particular the Greens and Liberals) and specific interest groups such as the defense industry.

In addition to the deterioration of relations between Russia and Germany, Apolinario sees chances of an escalation of the conflict, with the sending of more weapons to Ukraine, and “undefined consequences for stability on the European continent and for the global economy”.

Do not get lost

Numbers that help to understand the European dependence on Russian fuels:

Russia is the 1st world’s exporter of natural gas and the 2nd largest oil;
In 2021, the European Union imported 90% of the natural gas it consumed, and Russia was responsible for 45.3% of these imports;
Russia also provided 27% of oil imported by the bloc and 46% of coal.

Sources: Laerte Apolinário Júnior (PUC-SP) and European Commission

picture of the day

What happened this Wednesday (27)

Russia has cut gas shipments to Poland and Bulgaria, and the EU has spoken of “blackmail”;
Russia Says It Destroyed Depot of US Arms Sent to Ukraine;
UN warned about the situation of Europe’s nuclear plant;
Moldovan separatists have accused Ukraine of shooting and drone action.