German economy risks recession if Russian gas supply cuts off

Xinhua News Agency, Beijing, June 23. The Confederation of German Industry warned on the 21st that if Russia stops supplying natural gas to Germany, the German economy will face the risk of recession.

The industry group cut its 2022 forecast for German economic growth to 1.5 percent from 3.5 percent before the escalation in Ukraine, and believes that a recession in Germany may be inevitable if Russia cuts off gas supplies to Germany.

At this stage, Russia still supplies gas to Germany via Ukraine, but the gas supply is reduced. Recently, Gazprom has reduced the amount of gas supplied to Europe by the Nord Stream-1 gas pipeline. Reuters reported on the 21st that the “Beixi-1” natural gas pipeline is now only 40% of the usual level.

German Minister of Economy and Climate Protection Robert Habeck said the reduction in gas supplies was part of Russia’s blow to the German economy, “a new dimension. This strategy cannot be allowed to succeed”.

The German government said on the 19th that in response to Russia’s sharp reduction in natural gas supply, Germany will take a series of emergency response measures, including restricting the use of natural gas for power generation, increasing coal use and introducing a natural gas “auction” mechanism to give priority to increasing gas storage. For winter heating.

The head of the German Federal Network Agency believes that the current gas supply is difficult for Germany to reserve enough natural gas for winter heating.

According to Reuters, natural gas inventories in Europe are at about 55% of full levels and are scheduled to reach 80% and 90% in October and November, respectively.

The Italian government plans to buy coal if necessary to increase thermal power generation, Italian Minister of Environment and Ecological Transition Roberto Cingorani said in a statement on the 21st.

The Austrian government decided on the 19th that it will restart a coal power plant in the south to deal with energy shortages caused by reduced Russian natural gas supplies.

Europe is looking to Norway, Azerbaijan and other countries for more gas supplies. The Israeli Prime Minister’s Office issued a statement on the 15th that Israel will export natural gas to the EU via Egypt. (Bu Xiaoming)