Germany’s reliance on Russian gas stokes economic anxiety

In Nuremberg, they stopped illuminating historic buildings at night. In Potsdam, they lowered the temperature in the municipal saunas. And from his office in Berlin, the economy minister urged people across the country to take fewer showers. As Germany scrambles to save energy for fear that Russian President Vladimir Putin will cut off all natural gas flows to Europe this winter, many Germans now regret having succumbed to the fatal lure of Russian supplies.

“They were offering very cheap petrol prices, and that was very attractive. And that’s why we’re in this mess,” said Professor Claudia Kemfert, head of the Department of Energy, Transport and of the environment at the DIW, the German Institute for Economic Research.

“What happened was predictable. I’ve been predicting it for 15 years,” said energy expert Claudia Kemfert. (Courtesy of Kemfert)

Kemfert, along with experts in the United States and a number of other countries, had warned for years of the danger of relying on Kremlin-controlled gas.

“But Germany didn’t listen. They made their own decisions, and it was wrong. What happened was predictable. I’ve been predicting it for 15 years,” she said.

Before the invasion of Ukraine, Germany received up to 55% of its natural gas from Russia. Although that figure has now been reduced to around 30%, it is still considered dangerously high as the Kremlin has just halved supplies and fears are growing over further cuts.

Kemfert is not alone in beating Germany for becoming addicted to Russian energy. Mike Taylor of consulting firm Oxford Analytica told Marketplace that hackers have increased in the European Union.

“There is a lot of annoyance, especially in Poland. There is a lot of friction between Warsaw and Berlin,” he said.

Poland and a number of other Eastern European countries have long opposed Germany’s umbilical connection to Russia with the Nord Stream gas pipeline system, which runs directly under the Baltic Sea. to the northern coast of Germany.

Mike Taylor, principal analyst at Oxford Analytica.  (
Mike Taylor, principal analyst at Oxford Analytica. (Courtesy of Taylor)

“The Poles said to the Germans, ‘What made you devote so much of your gas supply to Nord Stream?'” Taylor said.

Polish Deputy Foreign Minister Pawel Jablonski, speaking to the BBC, could not resist the temptation to say: “We told them”.

“Some countries warned about this and were much better prepared,” he said.

The Poles, for example, are building a pipeline that will start bringing gas from Norway before winter. Poland’s gas storage facilities are nearly full, and the country’s liquefied natural gas terminal has received plentiful supplies by ship from the United States and Qatar, something Germany cannot do.

“Germany has overlooked the need to build LNG terminals. We advised them to do so,” Jablonski pointed out.

Germany is now rushing to set up LNG facilities and fill its gas storage tanks, which are currently less than 70% full. To ease pressure on supplies, Germany eagerly endorsed EU member states’ plan to voluntarily reduce their gas consumption by 15%.

“We need European solidarity right now, not only to reduce gas demand, but also to share the gas available during the winter in solidarity,” said Claudia Kemfert of DIW.

But the reserves of solidarity can run out. Not all EU members will be happy to share their essence in the dead of winter. Jablonski was clearly not sensitive to the fate of Germany:

“Poland is always ready to help those in need, but we can only regret that the spirit of solidarity was not present when the decisions regarding Nord Stream 1 and Nord Stream 2 were taken and implemented. “, did he declare.

Nor was there much solidarity during the debt crisis ten years ago. Germany has lectured and even bullied its heavily indebted southern European partners, accusing them of blatant irresponsibility. Now Germany is accused of something similar, Kemfert said.

“Now we can’t lecture anyone. We need to be lectured,’ she said, adding that there must be some doubt as to whether every EU member state would rally behind Germany’s aid in the event of a blackout. essence.

“There are countries that say we no longer stand in solidarity with Germany because they didn’t treat us well in other crises,” she said.

Among EU members, Germany is not the most dependent on Russian gas. Latvia, Austria, Bulgaria, Hungary, Greece and the Czech Republic have all purchased a larger percentage of their natural gas needs from Russia. But as the biggest economy in the bloc, Germany is by far the biggest consumer of fuel in the EU. The country’s main BASF chemical plant, for example, needs more gas alone than all of Greece, Denmark or Bulgaria combined.

Ole Hvalbye, energy analyst at SEB bank in Oslo, Norway.
“I fear an economic crisis that spreads across the whole of the European Union,” said energy analyst Ole Hvalbye. (Courtesy of Hvalbye)

German industry‘s reliance on Russian gas is so great that Ole Hvalbye, an energy analyst at SEB Bank in Oslo, Norway, fears for German industry if Putin turns off the tap.

“Parts of industry in Germany will shut down completely,” Hvalbye said. “And that will cause problems for the rest of the block. You get a recession in Germany, then I’m afraid you have an economic crisis spreading across the European Union.

And it is perhaps fear that unites the EU – rather than a genuine sense of solidarity – as energy insecurity darkens the anticipation of winter.

“I think the unity of the EU will hold,” Taylor of Oxford Analytica said. “But I think it will be irregular. It will be a bit like the euro debt crisis.

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