German private banks expect a severe recession in the event of a freeze on imports or deliveries of Russian oil and gas.
"A significant recession in Germany would then be difficult to avoid," said the President of the Association of German Banks (BdB), Deutsche Bank boss Christian Sewing, on Monday at a virtual BdB event, according to the speech.
The question of government aid measures for companies and sectors would then become even more urgent.
From Sewing's point of view, it is already clear that the economy will be significantly impacted by the Ukraine war.
"The chief economists of the private banks have halved their forecast compared to the estimates before the outbreak of the war," explained the BdB President.
Growth of around 2 percent is now expected for 2022.
Even this forecast is subject to change.
Because significant risks, such as energy prices first and foremost, have not yet been included in the calculation.
"The global supply and retail chains are once again being put to the test," said Sewing.
He referred to the new lockdown measures in China in the wake of the corona pandemic.
In addition, inflation rates in the euro zone would continue to rise.
"At over seven percent, they should reach a level this half year that was beyond our imagination just a short time ago." Sewing believes even higher rates are likely in the event of an energy embargo.
In this context, the BdB President renewed his appeal to monetary policy to intervene in good time.
"In the coming weeks and months, it will also be important for the European Central Bank to show that it has firm control and is ready to take countermeasures," he said.
Despite all the uncertainties, there is a lot to be said for ending the bond purchases soon and sending an initial interest rate signal.
"With the end of the negative interest rate policy, the ECB could limit a further increase in inflation expectations." Such a signal is urgently needed.