Germany braces for gas rationing
Germany has moved a step closer to gas rationing as the government grapples with supply shortages that threaten to topple the economy into recession.
The country is now in the second stage of its three-stage emergency alert system, and the economy ministry is calling for German households to reduce their gas consumption.
“From now on, gas is a scarce commodity in Germany… We are therefore now obliged to reduce gas consumption, now already in summer,” German Vice Chancellor, Robert Habeck, warned.
Businesses were also asked to curb their usage, and Habeck said that he can’t rule out rationing for German industry further down the line: “All consumers, whether in industry, in public institutions or private households, should reduce their gas consumption as much as possible.”
The government will also provide €15bn of loans to bring in gas supplies from other regions, as well as implementing an auction system to promote lower usage in the industrial sector.
The move comes as Vladimir Putin maintains his tight squeeze on European gas supplies, with the NordStream 1 pipeline currently running at only 40 per cent capacity. Moscow blames this on maintenance work and unreliable Canadian contractors. Berlin says it’s a political ploy.
“We must not fool ourselves. The cut in gas supplies is an economic attack on us by Putin,” Habeck said.
Despite the recent decision to fire-up coal-fired power stations – in a bid to find alternative energy sources – Habeck has made it clear that the priority is to fill gas storage to 90 per cent by December.
Facilities are currently 58 per cent full, more than this time last year. Yet with the war in Ukraine about to enter its fifth month, fears remain that Germany will not have enough gas to make it through the winter should Russia switch off the supply entirely.
Having invested heavily in Russian gas pipelines in the decade prior to the war in Ukraine, Germany now finds itself with most of its eggs in a basket that it no longer has access to.
Berlin’s decision to phase out nuclear power (set to be completed this year), and its climate target of a coal-less energy sector by 2030, mean Europe’s largest economy is set to struggle without a reliable source of gas.
Germany’s overreliance on Russian gas means it risks falling into recession, with a recent S&P Global survey showing the German economy is losing momentum in the second quarter.
As Vladimir Putin continues his attempt to make the West pay for its sanctions, and threatens to expand his war into the Balkans, Europe looks set to face an arduous few months.