Russian gas supplies to Europe will not resume until Western sanctions against Moscow are lifted. That’s how she explained Kremlin spokesman Dmitry Peskov, say that Sanctions were the only reason behind Russia’s decision to close Nord Stream 1, the largest gas pipeline between Russia and Western Europe, although Moscow initially announced it was only closed for maintenance.
“The problems with gas production are due to the sanctions that Western countries, including Germany and Great Britain, have imposed on our country and on a number of companies,” Peskov told the Interfax news agency. “There are no other reasons that could have caused this pumping problem. Sanctions that prevent the maintenance of the units, that prevent them from being moved without proper legal guarantees: it is these sanctions imposed by Western states that have brought the situation to what we see now.
Peskov’s words are just another dramatic piece to an already tense one Energy crisis engulfing Europetightened after Gazprom, Russia’s state-owned energy giant, announced that a three-day maintenance job due to an oil leak in one of Nord Stream 1’s turbines will be extended indefinitely.
The Impact of the Russian Gas Ban in Europe
Europe reacted immediately to Moscow’s initiative: the spokesman for the European Commission said that the blocking of gas flows was made with “false claims”. The US also accuses Moscow of using energy as a weapon.
But the point is now Energy prices hit new highs and even reached +30% and to force countries to speed up their search for alternatives to Russian gas.
The shocks of the Russian fuel stop on the financial market were immediate: the euro fell to its lowest level in 20 years, under $0.99. The value of the pound also fell 0.5% to a fresh low of $1.1444 as the UK economy is highly vulnerable to rising gas prices.
Now analysts expect the euro to fall further below the parity of $0.97 and stay around that level for the next 6 months.
The good news is that according to the calculations Europe will have enough petrol to get through the winter months. “The United States and Europe have worked together to ensure the availability of sufficient supplies. As a result of these efforts, European gas storage it will be sold out by the critical winter heating season. We still have work to do,” a White House official said.
What Europe is doing
Meanwhile, Ukraine has announced that exporting electricity from Kyiv can replace “significant amounts” of Russian gas, currently imported to Europe. But that can’t be enough.
The European Union has announced that it will continue to support Ukraine by all means and for as long as necessarywhatever threats or “blackmail” Russia directs at the 27 member states, EU High Representative Josep Borrell said during a press conference at the end of the eighth session of the EU-Ukraine Association Council. Brussels will provide its political, financial, humanitarian and military support “as long as it is necessary and as it is needed”.
But now countries across Europe are running for cover. With us, The Draghi government has approved a €17 billion aid package to help businesses and households against rising energy bills and nagging inflation, and another relief decree is on the way. All of it in addition to the 35 billion budgeted from January to mitigate the impact of very high electricity, gas and petrol costs.
Finland and Sweden have announced plans to offer billions in liquidity guarantees to energy companies.
That’s what French President Emmanuel Macron said the EU needs to step up its plans for renewable energy products and reform its electricity market.
there Germany, meanwhile trying to differentiate its energy sources. The government announced that it will keep two nuclear power plants on stand-by beyond the end of the yearradical change of direction, even after Reactivation of some coal-fired power plants. In 2011, under former Chancellor Angela Merkel, Germany decided to phase out nuclear power after the Fukushima nuclear disaster in Japan.
After a new network stress test two of the three remaining power plants “would be available until mid-April 2023 if required”said Economics Minister Robert Habeck.
The France-Germany axis against expensive energy
In the meantime Paris and Berlin have signed an agreement to jointly deal with the Russian gas crisis. “Germany needs our gas and we need the electricity produced in the rest of Europe and especially in Germany,” said French President Emmanuel Macron.
France has promised to complete the connections for Germany’s gas supply in the coming weeks when it will be necessary. More than half of France’s 56 nuclear power plants are currently down for repairs or maintenance, a fact that causes no fewer energy problems for France than the shutdown of Russian gas pipelines, which burdens Germany much more.
Berlin, in turn, has agreed to send electricity to Paris if necessary. In Germany, on the other hand, Chancellor Olaf Scholz announced one 65 billion plan to help people and businesses cope with rising prices.
Meanwhile, analysts are trying to understand how much the sanctions are really affecting the Russian economy. According to a new Yale University studyThe sanctions against Putin and his followers are weighing on the economy, although Moscow claims that the country does not feel the problem (Peskov used the phrase “great global storm” but assured that Russia is resisting and maintaining macroeconomic stability).
Yale’s team of experts managed to prove the falsity of Moscow’s claims according to which the economy remains solid and the West instead suffers the most due to “an economic war of attrition” (here the impact of sanctions on the Russian economy and what the Yale study says in detail) .