The gas thriller and Putin’s threats: Is Russia bluffing? – Analysts’ estimates

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The whole of Europe is watching with concern the movements of Russia, which closes the gas tap to Poland and Bulgaria, while threatening to do the same with other European countries. The same timeRussian President Vladimir Putin warned on Wednesday that any countries attempting to intervene in Ukraine would face a swift response from Russia and said that all decisions on how Moscow would react to this situation have already been taken.

Putin, according to Reuters, also said that the West wanted to cut Russia into various pieces and accused it of pushing Ukraine into a conflict with Russia. President Vladimir Putin noted, among other things, that the ruble, the banking system, the transport sector and the Russian economy as a whole have withstood the sanctions imposed on Moscow and promised a response to Russia’s efforts to isolate it.

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So far, official Germany has reacted calmly to Moscow’s announcements. “At the moment, the country’s energy adequacy is guaranteed,” the state-run energy network said in a statement on Wednesday, adding that it was “monitoring the situation very closely.”

After interruption of the supply of Polish gas to Poland and Bulgariathe President of the European Commission, Ursula von der Leyenreplied that the European Union “was prepared” for the cessation of gas supply and is preparing “a coordinated response”.

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“Gazprom’s announcement is one Russia’s new attempt to blackmail us with natural gas. We are prepared for this scenario. We prepare it coordinated our European response. “Europeans can be sure that we are united and in solidarity with the affected countries,” the commission president wrote on Twitter.

The Kremlin spokesman Dmitry Peshkovdismissed allegations that Moscow is using gas supplies as a tool of blackmail. Peshkov stressed that Russia is a reliable supplier of energy and that it is not involved in blackmail.

At the same time, the Ministry of Economy points out that “its flow natural gas “remains at normal levels”, but notes “with concern” that flows to two European countries have already stopped, so it remains “in close coordination with the EU”.

Economy Minister and Vice-Chancellor Robert Habek, from the Green Party, no longer rules out the possibility of Moscow ending energy supplies to Germany following the latest developments in Ukraine, while boldly stating that in this case the German economy is facing the risk of severe recession and blames the Kremlin that “uses energy as a weapon”. If Moscow, with its threats, simply wanted to soar gas prices, it has certainly achieved its goal. On Wednesday morning, the prices for futures contracts in natural gas increased by 20.2%. “Investors fear Poland and Bulgaria were just the beginning”points out the economist Markus Matthias Koep on the website of the first program of German television (ARD).

“A 10% is normal”

However, at noon on Wednesday the price increase was limited to around 10%. Robert Ratfeld, an analyst at the holding company Wellenreiter, told ARD that “a 10% increase in reaction to the closing of the faucet in Poland and Bulgaria is rather normal”, because if we look at the big picture, prices remain below maximum levels of the last six months “. Commerzbank analyst Carsten Fritz also spoke of a normal market reaction, recalling that the Yamal pipeline, which carried gas to Poland, had already had a degraded role in recent months. “From January 2022, gas flows through Yamal do not exceed 2% of its total sales Russia to Europe “, he points out.

The question is not only whether Germany can survive without Russian gas, but also whether Russia can survive without its exports.ARD analysts estimate, according to Deutsche Welle: “Today 18% of Russian gas exports go to Germany, which is the largest market for Russia”, they remind. Matthias Koep, an economist at the military academy at the Technical University of Zurich (ETH), argues that Russia’s boycott of Poland and Bulgaria, countries that are “not important gas markets anyway” is primarily “one intimidation for countries like Germany, but which is not credible. ” In the long run, Cope argues, Russia “is like shooting itself in the knee” with this tactic, as it proves to be an unreliable energy supplier and interlocutor. “In the future, anyone who has an alternative will avoid Russia,” warns the German analyst.

Review of financial forecasts

However, presenting the “spring forecast” for the course of the German economy, Vice Chancellor Robert Hubeck was forced to manually revise the overall forecast for the current year. According to the new data, the forecast is around 2.2% per year for 2022 and 2.5% for 2023. The good news, says Habek, is that in recent months the dependence on Russian natural gas has significantly decreased. gas: While before the start of the war Germany imported 50% of its needs from Russia, today the percentage has been reduced to 35%.

Source: News Beast

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