BERLIN (AP) – Germany’s employers and unions have joined forces to oppose an immediate European Union ban on natural gas imports from Russia over its invasion of Ukraine, saying such a move would result in factory closures and job losses in of the bloc ‘s largest economy .
“A rapid gas embargo would lead to lost production, shutdowns, further deindustrialization and the long-term loss of jobs in Germany,” said Rainer Dulger, chairman of the BDA employers’ group, and Reiner Hoffmann, chairman of the BDA DGB, in a joint statement on Monday in the German news agency dpa.
They argued that EU sanctions must be well-targeted in order to put pressure on Russia while minimizing the damage to the countries imposing the sanctions, saying: “In the current discussion, we don’t see that.”
The statement comes as European leaders discuss possible new energy sanctions on Russian oil after a decision on April 7 to ban Russian coal imports from August. Ukraine’s leaders say the revenues from Russia’s energy exports must fund Moscow’s destructive war on Ukraine and end it.
This won’t be easy. The 27 EU countries get about 40% of their natural gas from Russia and about 25% of their oil. Natural gas would be the most difficult to do without, according to energy analysts, as most of it comes by pipeline from Russia and supplies of LNG, which can be ordered by ship, are limited due to strong global demand.
Germany, a major production center and importer of Russian gas, has so far resisted an immediate shutdown, saying instead it would phase out Russian oil by the end of the year and most Russian gas imports by mid-2024. The EU’s executive board has outlined steps to cut Russian gas consumption by two-thirds by the end of the year by using more pipeline gas from Norway and Azerbaijan, importing more liquefied gas, accelerating the roll-out of wind and solar projects, and stepping up energy-saving efforts.
German Vice Chancellor Robert Habeck said in an interview with Funke media group that “an immediate gas embargo would endanger social peace in Germany”.
Despite widespread economic sanctions against Russian banks and individuals, the EU continues to transfer around $850 million a day to Russia for oil and gas, even as EU governments condemn the war in Ukraine. Gas-intensive companies include manufacturers of glass, metals, ceramics and chemicals.
Industry officials say natural gas is in many cases irreplaceable in the short term, and associations representing food processing, metal-galvanizing and glass companies and the head of the chemical industry union have also spoken out against a sudden halt to Russian gas imports.
Energy analysts say a full Russian gas shutdown could cause a recession and leave some EU governments forced to ration gas. The government would decide which companies are less important and supplies to those companies would be halted or reduced to spare homes and hospitals protected by EU law. In any case, such a shutdown would drive up already high gas prices even further.
Analysts say Russian crude would be easier for the EU to substitute than gas, but that a boycott would still result in higher energy prices, hurting consumers who are already facing record inflation of 7.5% in the EU.
___
Follow all AP stories on the Ukraine war at https://apnews.com/hub/russia-ukraine