Gas: Putin Pressure and Europe Concerns Over Total Faucet Shutdown

Europeans are increasingly worried about the possibility of a complete cessation of gas supplies from Russia, with Italy calling for a new meeting to discuss the issue.

Gazprom has cut gas flows to Europe by about 60% in recent weeks, prompting Germany, Italy, Austria and the Netherlands to announce they could turn to coal again.

This is as Europe – which receives about 40% of its natural gas through Russian pipelines – seeks to quickly reduce its dependence on Russian hydrocarbons in response to the Kremlin attack on Ukraine.

“Russia is gradually reducing gas supplies – in some countries by almost 100%, in others, cutting 10, 15%,” Josep Borrel, the top EU diplomat, told CNBC today.

“I do not think they will cut off gas overnight, especially as we enter the summer and during the summer gas is not a strategic weapon. But winter can be difficult and we must be prepared in Europe.” .

Asked if he was worried that Russia might cut off gas supplies altogether, Luxembourg Prime Minister Xavier Bettel told CNBC: “I am fully aware that they can do it. They can. It is their choice. They can close or open. “.

He stressed the importance of all 27 EU member states agreeing on their approach to the issue. “In Moscow, one person can decide for himself to cut off energy to Europe.”

European Parliament President Roberta Metzola said on Thursday that the situation was worrying.

“We have had (concerns) since day one. In the end, some countries are more dependent on Russian gas than others. Not only in the short and medium term, we need to find solutions to this,” she said.

Italy, meanwhile, called for an EU-wide meeting next month to discuss further the energy and economic situation, according to three EU officials who did not want to be named because of the sensitivity of the issue.

Concerns about a new recession

Reduced gas flows have heightened concerns that the EU could face a difficult economic period. Berenberg analysts said this week that the latest cuts in gas meant their new core business for Europe was the recession.

“Struck harder by the US than the energy price shock, we predict that the eurozone economy will enter a recession before the US,” Berenberg analysts said in a note on Tuesday.

EU leaders have so far refused to talk about a recession or new economic crisis, but have acknowledged that next winter will be complicated.

Speaking to CNBC today, Swedish Prime Minister Magdalena Anderson said she was ready for a new meeting of EU leaders next month, provided the bloc could announce measures to address the economic pressures.

“We are definitely in a difficult economic situation with inflation and shortages of gas and electricity,” she said.

Roberta Metzola agrees with this view. “The coming months will be very difficult and we are worried that we are facing a, say, costly and difficult winter in terms of energy.”