Germany is facing a sudden acceleration of its gas crisis. A 60% drop in Russian supplies since early June threatens to plunge Europe’s biggest economy into severe economic shock. But Berlin’s confusing response to Moscow’s latest move, its hesitations on energy policy, and its attempts to delay the impact of higher energy prices on the economy risk making matters worse.
Germany moved to phase two of its three-stage emergency gas plan on June 22, after Russian supplier Gazprom cut deliveries via its Nord Stream 1 pipeline to just 40% of capacity last week.
Economy Minister Robert Habeck said the restriction of gas supplies by Moscow amounted to “an economic attack” on Germany as he announced the move to the “alarm” level, which triggered a government plan to switch back to coal-fired power plants. Habeck however announced that utilities could not automatically pass on higher energy prices to their customers, as the move to the alarm stage would in theory allow.
Germany should “now search without taboos for all solutions” to increase domestic natural gas output including fracking, the chief executive of German energy provider E.ON Leonhard Birnbaum said in an interview with WirtschaftsWoche podcast.Editing by George Hay and Streisand Neto
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