Germany accuses Russia of “economic attack” and triggers gas alert stage

Germany triggered an “warning phase” of an emergency gas program on Thursday in response to Russia’s declining supply, but until it allowed power companies to pass on soaring energy costs to customers in Europe’s largest economy. Did not reach.

Also read: Here’s how Elon Musk’s SpaceX high-speed rocket transports U.S. Army weapons everywhere in 60 minutes:

This measure has been the latest escalation in the conflict between Europe and Moscow since Russia’s invasion of Ukraine, revealing the block’s reliance on Russia’s gas supply and triggering a desperate search for alternative energy sources.

The decision, announced by the Minister of Economy, marks a major shift, especially as Germany has built a strong energy relationship with Moscow dating back to the Cold War.

This week, a warning was issued that Germany could be in recession if Russia’s supply were completely cut off due to reduced gas flow. Thursday’s S & P Global Flash Purchasing Managers Index (PMI) showed that the economy was losing momentum in the second quarter.

“Reducing gas supply is an economic attack by (Russian President Vladimir) Putin,” Economic Minister Robert Habeck said in a statement, adding that Germans must reduce consumption.

“Obviously, it is Putin’s strategy to create anxiety, push prices up and divide us as a society,” he added. “This is what we are fighting for.”

Habeck said gas distribution would hopefully be avoided, but it cannot be ruled out.

Russia denied that the gas supply cuts were planned, and state-owned supplier Gazprom accused the delay in returning equipment installed by Western sanctions.

Under the Phase 2 program, Berlin will provide a € 15 billion ($ 15.76 billion) credit line to fill its gas storage facility. In addition, a gas auction model will be launched this summer to encourage industrial gas consumers to save gas.

If the government determines that the risk of long-term supply shortages is high, it will initiate a second “warning phase” of the three-stage emergency plan. Theoretically, it allows utilities to pass on high prices to industry and homes, thereby helping to reduce demand.

The transition to the next stage has been speculative since Gazprom reduced flow to just 40% of capacity through the Nord Stream 1 pipeline across the Baltic Sea last week.

Faced with a decline in gas flow from its major supplier Russia, Germany has been in Phase 1 of its emergency program since late March, with a focus on more rigorous monitoring of daily flow and filling of gas storage facilities. increase.

Risk of complete confusion

In the second phase, the market can still function without the need for state intervention starting in the final emergency phase.

“We have already seen significant cuts,” said a European gas trader. “The system is still working, but there isn’t much left,” he said.

Benchmark for July delivery The Dutch wholesale gas contract rose 4% to € 131.50 per megawatt / hour (MWh) and then settled to € 128 / MWh by 0835 GMT.

Nord Stream 1 will be undergoing maintenance on July 11-21, when the flow will stop.

The head of the International Energy Agency (IEA) said on Wednesday that Russia may cut off gas to Europe altogether to strengthen its political influence, adding that Europe now needs to prepare. ..

Russia’s gas flow to Europe via Nord Stream 1 and Ukraine was stable on Thursday, but the regurgitation of the Yamal pipeline turned upward, operator data showed.

Some European countries have outlined measures to withstand supply pressures and avoid winter energy shortages and inflation surges, and can test the continent’s determination to maintain sanctions against Russia.

Supply cuts have led German companies to consider painful production cuts and rely on previously unthinkable forms of energy pollution to adapt to Russia’s outlook for gas shortages.

The European Union suggested on Wednesday that it would temporarily rely on coal to fill its energy shortage, describing Moscow’s gas supply cuts as “illegal moves.”

Frans Timmermans, head of climate policy for Brock, said Thursday that 10 of the 27 EU member states issued “early warnings” about gas supplies. This is the first and least serious of the three crisis levels identified in the EU’s energy security regulations.

“The risk of complete gas destruction is more realistic than ever,” he said. Germany accuses Russia of “economic attack” and triggers gas alert stage

Back to top button