“Loss of millions of jobs”: an economic recession was predicted in Germany with the rejection of energy resources from Russia

Germany could face an economic downturn if it refuses to buy Russian energy resources.

Such a forecast on Friday, April 22, was presented by the Bundesbank.

According to the organization, with the introduction of an embargo on the import of oil, gas and coal from Russia, the volume of German GDP in 2022 will be reduced by 2%.

Earlier it was assumed that by the end of the year the German economy would grow by 3%.

Broad energy sanctions against Moscow will lead to an increase in oil prices to $170 per barrel, according to the German central bank.

At the same time, the cost of natural gas in Europe may increase most noticeably, since it will be difficult to quickly replace Russian fuel, German experts admit.

This state of affairs runs the risk of seriously hitting the domestic production of Germany and leading to an even greater increase in consumer prices, Bundesbank experts do not exclude.

It should be noted that in March the annual inflation rate in Germany reached 7.3%, the highest figure in the last 48 years.

This is evidenced by the data of the Federal Statistical Bureau of the country.

Recall that since the end of February, the European Union, the United States and a number of other states continue to impose new economic sanctions against Russia.

This is how the West reacts to Moscow's special operation to protect the Donbass republics from aggression from Ukraine.

In total, more than 9.9 thousand restrictive measures have already been introduced against Russia - more than against Iran, Syria, North Korea, Venezuela, Myanmar and Cuba combined.

This is stated in the materials of the global sanctions tracking database Castellum.AI.

Restrictions, in particular, affected the energy sector of Russia.

For example, the United States and Great Britain completely refused to buy energy resources from Moscow.

The European Union, in turn, announced a gradual cessation of purchases of Russian coal.

Now European countries are discussing the possibility of imposing an embargo on oil and gas supplies from Russia.

However, among the states of the region there is still no unity on this issue, said the head of EU diplomacy, Josep Borrell, during an interview with journalists from the European alliance of news publications LENA.

“There are many issues under consideration (on oil and gas. -

), many proposals that are being studied.

What is the best course of action?

Tax?

Ban?

Many economists say the smartest thing to do would be to make Russian oil and gas more expensive to create an incentive to look elsewhere.

None of these proposals received the required unanimous approval,” admitted Borrell.

According to him, some EU countries are planning to veto any collective decision to ban energy imports from Russia.

Germany, in particular, opposes the embargo.

As German Chancellor Olaf Scholz said in an interview with Der Spiegel, such restrictions will not lead to the end of the special operation in Ukraine, but at the same time they will hit the economies of Germany and the EU.

“The point is that we want to avoid a major economic crisis, the loss of millions of jobs and the closure of factories that would never open again.

This would have serious consequences for our country, for the whole of Europe,” Scholz believes.

Chain reaction

According to the latest Eurostat estimates, in 2020 Russia provided 41% of the EU's gas needs and 37% of its oil needs.

At that time, Germany was one of the most active importers of Russian energy resources.

Approximately 34% of the oil supplied to the FRG and 66% of the gas Berlin purchased from Moscow.

As an alternative to raw materials from Russia, Germany could increase its purchases of liquefied natural gas (LNG) from other countries.

However, the search for such significant volumes of fuel will take time, and its supply will cost Berlin much more.

Sergey Pikin, director of the Energy Development Fund, told RT about this.

Moreover, according to the specialist, the existing gas infrastructure of Germany does not allow the country to accept large volumes of LNG: today Germany does not have a sufficient number of terminals.

“Therefore, if an embargo is introduced, then in total about half of Germany's energy consumption will be in question.

The population is traditionally a priority for heating, so there may be enough resources for it.

Meanwhile, the industry will not receive energy in full, which will inevitably affect the economy.

For example, the largest chemical concerns in Germany may stop,” Pikin said.

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As Artyom Deev, head of the analytical department at AMarkets, recalled in an interview with RT, traditionally gas, oil and coal are essential resources for generating electricity.

Therefore, their rise in price along the chain first leads to an increase in business costs, and then to an increase in prices for a number of services and goods, including food.

“At the same time, it should be understood that Germany is the leading EU country with the most stable and sustainable economy.

If here inflation is accelerating at a record pace, then in other EU countries the rise in prices will be much stronger.

However, European politicians have clearly shown their intention to sacrifice the economy for the sake of politics,” Deev added.

gas calculation

Energy prices in Europe began to rise rapidly in 2021.

This was largely due to the accelerated energy transition policy of the EU.

The sanctions decisions of European states against Moscow only aggravated the situation, and now the problems of poverty, food security and energy availability are becoming more and more acute.

This was announced on Friday by Russian Finance Minister Anton Siluanov.

“The scale of inflationary pressure is unprecedented in the context of recent decades.

This is the result of the irresponsible actions of the financial authorities of Western countries, from which the whole world suffers, and above all the most vulnerable countries with a low level of income,” Siluanov believes.

Under the current conditions, the EU countries may refuse to buy Russian oil, but will not impose an embargo on gas, Sergey Pikin is sure.

Thus, in the near future, Europe is likely to continue to buy gas from Moscow and will be forced to pay for it in rubles, the specialist believes.

Recall that on April 1, in Russia, on behalf of Vladimir Putin, a new settlement procedure was introduced for the supply of natural gas to unfriendly countries.

Now Moscow accepts payment for energy raw materials only in rubles.

To do this, foreign buyers must open two special accounts with Gazprombank: in foreign currency and in rubles.

First, the money must be transferred to a foreign currency account, after which the bank on the Moscow Exchange will exchange these funds for rubles and credit them to the ruble account.

Immediately after that, the foreign partner will be able to transfer rubles directly to the gas seller.

“Some European states have already declared their readiness to pay under the new scheme.

They will still be able to transfer euros to a Russian bank, which then transfers the money into rubles and gives it to Gazprom.

So in the end, they will all agree to pay in rubles, but politicians will hide behind the fact that European consumers initially transfer euros, ”concluded Sergey Pikin.