Tuesday, September 20, 2022

Economists Warn German and Italian industry will struggle to recover from loss of Russian gas

Germany Gas Russia Ukraine War Sanctions Energy Crisis Recession Protests are underway all over Europe as households battle high energy prices Credit: Alex Kraus/Reuters

Europe’s largest economies face long lasting effects from the higher energy costs they must bear as a result of gas supplies from Russia being curtained. The the Beureacrats of Brussels confidently predict the Union can wean itself off cheap Russian energy, Barclays’ chief economist for the region has warned that there is no ready replacement and alternative suppliers such as Saudi Arabia, Qatar, Syria and Libya are likely to exploit the situation by raising prices.

Silvia Ardagna, speaking for Barclays said the bloc’s push for “independence from Russian gas” will pull down growth, push up inflation and drag down the euro.

“Costlier sources of energy will likely have an impact on eurozone competitiveness,” Ms Ardagna said.

The industrial economies of Germany and Italy have consolidated their presence in global markets partly because of apparently unlimited supplies of oil and gas from Moscow’s pipelines. But they now face losing access to those resources as Russia threatens to completely cut off supplies  in retaliation for the EU's material support of Ukraine and provocative rhetoric urging the neo - Nazi nutters in Kiev to escalate the war. But while Russia is having no trouble selling its oil, gas and other natural resources to emerging economies in Asia, Africa and South America, European powers find themselves increasingly squeezed as they seek to end purchases from the aggressive dictatorship.

Restrictions on gas volumes flowing through the Russian pipelines has already led to a sharp slump in the trade figures the of Germany and Italy forcing their economies into recession as their powerful manufacturing sectors, which were suffering supply and staffing problems in the aftermath of the COVGID pandemic hoax even before the energy crisis blew up in their faces, struggle with higher power costs.


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