In Europe, Russian gas is now the number one issue. Many countries are so dependent on it that there could be a problem in the event of a sudden interruption in supply. Bloomberg has gained access to a European Commission forecasts document which says, among other things, that European GDP could fall by up to 1.5% if Russian gas is shut off.
It would all depend on how cold it gets in this case. In the event of a mild winter, the drop could be in the range of 0.6-1%. A set of recommendations is being prepared to help countries cope with this crisis. The measures primarily describe restrictive steps to save gas.
The document states.
“A coordinated EU response ahead of the winter and solidarity between member states would limit the negative impact on GDP and jobs.”
There are concerns about the reactivation of Nord Stream 1
In recent articles, we informed you that the Nord Stream 1 pipeline, which runs along the Baltic Sea bed and is the main route for gas between Russia and Germany, is under planned maintenance. Although this is only due to last until Thursday, there are concerns from several European countries as to whether supplies will actually resume. Therefore, this document carries more weight and should be taken seriously.
Especially after the announcement by Germany’s largest gas importer, Uniper, that gas supplies from Russian state-owned giant Gazprom have been cut since June due to force majeure.
At the same time, the document provides an outlook for the future.
“There is no reason to believe that this pattern will change. Rather, several signals, including the latest decision to further reduce supplies to Italy, point to a likely deterioration in the gas supply outlook.”
The document suggests that early action to reduce demand could limit the negative impact of Russian gas supply disruptions on EU GDP to 0.4%.