According to RT, the director of BNP Paribas, Lutz Diederichs, said that in the event of a complete shutdown of gas supplies from Russia, it is forecast that the German economy will fall into recession and lenders will be asked to demand more money from companies.
Senior figures in the financial industry are concerned about scheduled maintenance work at the Nord Stream pipeline. This is an important gas route connecting Germany with Russia. Some EU officials have suggested that Russia may not be able to resume supply once the maintenance is done.
Both lines of the pipeline will be closed for annual repairs from July 11 to 21, and the shutdown has been agreed upon by all partners.
The aforementioned precautions taken by German banks so far are still lower than the reserves they hoarded at the height of the COVID-19 pandemic.
Germany is heavily dependent on energy imports from Russia, and if it completely loses access to gas supplies, its economy will be hit hard. Deutsche Bank CEO Christian Sewing said that if this event happened, Germany would be in a deep recession.
Meanwhile, Germany only has enough gas reserves for a month or two in case the flow of gas from Russia is completely stopped.
Klaus Mueller – Director of Germany’s Federal Network Agency – told Funke media group: “If we don’t receive more gas from Russia and go through the cold winter as usual, gas reserves are stored. Right now – including the committed gas deliveries to other European countries – there will probably only be enough for 1 to 2 months.”
Earlier, the German Economy Ministry on July 1 announced that the country’s natural gas storage facilities were only nearly 61% full.
Economy and Climate Minister Robert Habeck said Germany is in talks with Canada and the European Commission on how to return key components to Russia’s Nord Stream pipeline.
Last month, Russian energy supplier Gazprom announced it was forced to cut natural gas flows to Germany via the Nord Stream pipeline by 60 percent, because Siemens turbines from the Portovaya pumping station in Vyborg were stuck in Montreal, where they are taken for maintenance. The parts are subject to Canadian sanctions, and Canada has said it cannot return it because it would violate sanctions. The situation has prompted several EU countries to announce emergency measures to reduce the use of natural gas.
If Russian gas is further disrupted, Germany will have to declare a level 3 emergency. Accordingly, the government of this country must intervene directly in the gas market to ensure supply for customers. protection, such as private households, small businesses and hospitals, which account for 37% of gas consumption. Germany will be short of about 10% of gas if Russia stops supplying it completely.
An analysis from Capital Economics suggests that the burden will fall on the companies that use the most energy and gas, mainly in the chemical, base metals, refined metal products and glass sectors. Capital Economics predicts that will reduce German manufacturing output by about 5% and reduce GDP by about 1%.
“We are increasingly concerned about the energy situation unfolding in Germany,” said George Saravelos, global head of FX research at Deutsche Bank.
German companies are already feeling the pinch. Uniper’s share price fell 18 percent in the middle of last week after cutting its profit forecast and saying it was in talks with the government about a bailout.
