As a matter of fact, the classical description of the scenario of any systemic economic crisis, especially the crisis within the framework of the current economic model, is formulated quite simply.
Volatility.
Turbulence.
The collapse.
That is, what we are now observing in fact in real time.
But in our particular case, this is a rather simplified vision of an even much more complex situation, unfortunately.
Yes, and we live with you far from classical times.
And the classical definitions, alas, no longer describe much.
Including, in particular, what is happening now not even on gas - look wider!
- in the energy markets of Europe.
And how it can affect European markets in general, not even in the mid-term, but in the short-term historical perspective.
Although this is, in general, obvious: shitty will be reflected, excuse my French.
Well, if you use academic terms, the prognosis is extremely unfavorable. The collapse in the spot gas markets, which happened in the fall of this year and was initially regarded as an unpleasant phenomenon, but quite local, now simply mathematically cannot but have consequences, for a start, in related industries. And the most unpleasant thing for the current state of the European economy is, first of all, in the energy sector, in which, in connection with the green transition proclaimed by democratic politicians, everything is not easy anyway.
Let us just recall, for example, about the closing German nuclear power plants: this generation, you know, in the current conditions of energy shortage also needs to be replaced with something.
And as far as the entire European industry, from food and household chemicals to electrical engineering and mechanical engineering, is energy-intensive, has long been, as they say, the talk of the town.
And this is probably not even worth mentioning.
However, let's go in order.
The easiest way to start the final review of gas markets over the past year is to write: “Nothing at the beginning of a prosperous 2021 seemed to foreshadow the threatening signs of a funnel of a systemic economic crisis,” into which (the funnel), at least, European markets were already its, in 2021, the end.
It would have sounded beautiful, but it would not have become true anyway: any more or less sane expert understood in advance not only the scenario of an impending energy catastrophe, but everything else, excuse the professional slang, was read once or twice at the average level an economics student, approximately from the third year, and nothing more.
Well, of course, if the current economists, for the most part, were educated within the framework of the "Bologna system", someone else teaches not to gush with creative ideas, but to just count.
Judge for yourself.
What, someone on the Old Continent did not know how much the own European production of blue fuel would fall this year?
No, I, of course, understand that European politicians in this regard are quite virgin people and their real life is not particularly interested, in contrast to gender diversity.
But this information, including on the Groningen field, which is the base for continental production (which, by the way, owes its importance in spot pricing to the famous Dutch gas hub TTF), was published in a whole bunch of official sources.
It was quoted, however, quite thoughtlessly, by a huge number of European and not only media.
Moreover, it has been voiced more than once in the official agenda of the "energy" European Commission.
For some reason, no one paid much attention to her.
Or was it impossible to foresee a sharp "post-like" growth in demand and, consequently, prices for liquefied natural gas in the premium markets of Southeast Asia? With all the very predictable, we must pay tribute, the consequences, such as reorientation to the markets of Southeast Asia, including the American LNG? Or did no one consider potential problems and delays with the certification of the Russian-European Nord Stream 2 gas pipeline?
Yes, everyone understood everything in the most wonderful way - even the Russians, who at first reinsured themselves on European markets almost in a cross way.
And then, after thinking well, we made a fundamental change in our own gas strategy and recognized the development of domestic markets as a priority for the next few years - just remember the famous “gasification”.
And this, in addition to a social function that is understandable and pleasant for voters, is also the formation of additional solvent markets, excuse me for some cynicism.
Therefore, responsible European politicians (and the expert community) also simply could not help but understand this.
However, in order to stop the impending crisis, they did not, in general, do anything.
As a result, a steady trend for the growth of gas prices in European markets began in spring. When the average price on the spot, according to the data of the same Dutch hub TTF with "next day" delivery, fluctuated in the range of $ 250-300 per thousand cubic meters. In the last days of summer, the cost of a similar contract has already exceeded the $ 600 unthinkable at the beginning of the year, and at the beginning of October it crossed the $ 1000 threshold. Well, in the current December, quotations actually doubled, breaking another sad record: there have never been such persistently high prices in the entire history of the operation of gas hubs in Europe. And as the Russian side, for example, in the person of the same “energy” Deputy Prime Minister Novak, who has fully proved his competence, believes, it is definitely not worth expecting a stable trend for a decrease in gas prices, at least in the coming months.
And most European analysts believe that these prices - insane from the point of view of the real sector - are still not even at their peak.
In their opinion, they will reach their peak values in this cycle only by July - August next year.
And this is already the reality that no fast certification of Nord Stream 2 can really prevent.
No, of course, to mitigate the situation - especially in the northwestern (actually German) industrial cluster - Nord Stream 2 is quite capable: it was actually built for this.
For a very energy-intensive German industry, any serious fluctuations in energy prices are very, very painful, if not catastrophic.
So the German industrialists are likely to solve their problems and those around them, no matter how their own political greens protested against it.
But strategically, these additional 55 billion cubic meters are unlikely to save all European markets.
First, they are clearly not enough for this.
And secondly, because the crisis is no longer just gas and even just energy: so far, of course, a critical situation begins to be seen only in those markets that are not protected by long-term contracts with a Russian supplier.
Such as Ukraine, Great Britain, Poland and other "economic tigers" of recent years.
But it is extremely naive to believe that this process will not cover deeply integrated European economies over time, at least along the chain of costs: it will, of course.
Moreover, excuse me, how.
And the current obvious crisis on the gas markets, along with impending menacing signs, is not even a crisis yet, but its first symptomatology.
It is just a trigger, a kind of trigger for the still, fortunately, not yet a systemic economic catastrophe, into the funnel of which European markets are already slowly being drawn.
And which, if everything goes according to an increasingly likely negative scenario, at least in its current form, many European economies and institutions will definitely not survive.
The point of view of the author may not coincide with the position of the editorial board.