Source: JD Heyes
The economic fallout from Russia’s invasion of Ukraine is continuing to reverberate throughout Europe, though it is hitting some countries far worse than others.
That is especially true of Germany, which was reliant on Moscow for the lion’s share of its annual natural gas supply.
The U.S. and other Western nations have imposed sanctions on the purchase of Russian oil and gas, but not all European nations are keen to do that so quickly without being assured they can obtain supplies elsewhere. And with the Biden regime so quick to dismantle the U.S. oil and gas industry, thanks to demands by lunatic leftists within the Democrat Party, Berlin can’t really depend on a steady supply from America. And there isn’t any other viable alternative readily available.
That said, the Germans are increasingly skittish about simply dropping Russian gas, and with good reason: Without it, the country’s economy is liable to collapse completely, according to the CEO of Germany’s multinational BASF SE, which is the world’s largest producer of chemicals.
Company CEO Martin Brudermuller warned that either limiting or cutting off energy imports from Russia would likely put in doubt the viability of small and medium-sized energy firms to continue operating in the country while also spinning Germany off into the most “catastrophic” economic crisis since the end of World War II, when the country lay in ruins following an Allied invasion.
Brudermuller, who made his remarks to the Frankfurter Allgemeine newspaper right before German officials, in the middle of last week, provided an “early warning” to industries as well as the German population that there could potentially be shortages of natural gas, as the Kremlin appears committed to President Vladimir Putin’s demand that “unfriendly countries” settle their energy payments in rubles, the Russian currency, following Western sanctions.
While he suggested that “Germany could be independent of Russia gas in four to five years,” for now, he conceded, “LNG imports cannot be increased quickly enough to replace all Russian gas flows in the short term.”
In the meantime, Brudermuller said “it’s not enough that we all turn down the heating by two degrees now,” since “Russia covers 55 percent of German natural gas consumption.” He explained forcefully that if Moscow’s gas flows disappeared overnight, “many things would collapse here” since “we would have high levels of unemployment, and many companies would go bankrupt. This would lead to irreversible damage.”
“To put it bluntly: This could bring the German economy into its worst crisis since the end of the Second World War and destroy our prosperity,” Brudermuller continued. “For many small and medium-sized companies, in particular, it could mean the end. We can’t risk that!”
Here is the question posed by the newspaper, along with the BASF CEO’s response:
And what if, for example, Putin’s demand for payment in rubles leads to an immediate stop in gas supplies?
“A delivery stop for a short time would perhaps open the eyes of many — on both sides. It would make clear the magnitude of the consequences. But if we don’t get any more Russian gas for a long time, then we really have a problem here in Germany,” he noted.
“At BASF, we would have to scale back or completely shut down production at our largest site in Ludwigshafen if the supply fell significantly and permanently below 50 percent of our maximum natural gas requirement. Minister Habeck has already activated the early warning level of the gas emergency plan,” he continued.
Russia’s Putin played his hand brilliantly, whether we want to admit that or not, in calculating what he could and couldn’t get away with in terms of dealing with Ukraine. Sanctions on his country will sting, but he seems far more prepared to weather the economic storm than those countries trying to sanction him.