/ world today news/ The termination of Russian gas supplies will lead to a decrease in industrial production in Germany by more than 10%, according to a study commissioned by the Association of Bavarian Businessmen (VBW), reports Der Spiegel.
According to the publication, the analysis was carried out by Prognos AG, based on a situation where Russian gas supplies will be cut off from July 1 until the end of this year.
“The study predicts a bleak scenario in the event of a complete and sudden disruption of supplies. If Russian gas supplies are cut off in the second half of the year, i.e. from July, economic output in Germany could drop by 12.7%,” notes Der Spiegel.
According to Prognos AG chief economist Michael Behmer, under such a scenario the German economy would be in a “deep recession”.
“Quantitatively, the consequences of the suspension of Russian gas supplies will affect a total of about 5.6 million employees,” the expert points out.
As noted in the study, industry accounts for more than a third of all gas consumption in Germany.
“Without energy supplies from the Russian Federation, it would have had half as much gas,” the authors state.
Despite the ability of German industry to partially offset losses with the help of other energy sources, gas is an irreplaceable energy resource for a number of sectors of the economy.
In particular, the chemical, glass and steel industries will suffer the most. According to the authors of the study, the losses will affect both production and supply chains in other industries, so in the case of the forecast scenario, in the second half of 2022, losses to the industry of 144 billion euros can be expected.
“Without paint, glass and steel, the automotive industry and many other sectors of the economy would be in a difficult position. Serious damage will also be done to the food industry,” notes Der Spiegel.
According to Behmer, a significant part of the missing products can be replaced with the help of imports, but “in the end, the suspension of gas supplies from the Russian Federation will affect the entire national economy of Germany.”
“In general, this means that losses in just six months would amount to a total of 193 billion euros,” continues the expert.
“The dependence of the German economy on Russian gas is underestimated,” he concludes.
Finally, the management of the world’s largest chemical complex BASF admitted that the concern may be closed due to lack of gas.
BASF Senior Economist Peter Westerheide said the plant’s operations could be saved by reducing load and using alternative energy sources if the complex was supplied with gas for at least 50% of its needs.
On June 23, Germany’s Vice-Chancellor – Minister of Economy and Climate Protection Robert Habeck said that the German government has raised the level of readiness to respond to an uncertain situation with gas supplies to the penultimate one, which should allow gas storage to be filled until winter. despite the reduction in supplies from the Russian Federation.
This stage assumes that the government has the right to recommend that companies save gas. The last step is introduced in an emergency situation when the market is unable to provide gas supply. In this case, the responsibility for distribution rests with the state operator, the Federal Agency for Electricity Transmission Networks, which decides the priority of gas delivery.
Translation: SM
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