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ENERGY

What would happen if Germany stopped accepting Russian gas?

Brutalities in the Kyiv suburb of Bucha have reignited a debate about whether Germany should support an immediate embargo on Russian gas and oil. What impact would that have on people living in Germany?

A woman checks the temperature of her radiator while adjusting the thermostat.
A woman checks the temperature of her radiator while adjusting the thermostat. Photo: picture alliance/dpa/dpa-tmn | Christin Klose

The Russian invasion of Ukraine has been raging on for more than six weeks, and with every hour that passes, more reports of civilian bloodshed and alleged war crimes emerge. In the EU, many eyes have turned on Germany, where the government is still sending hundreds of million euros to the Kremlin for energy imports each day.

After the devastating revelations of Russian brutality in the district of Bucha near Kyiv, campaigners in Germany are ramping up their calls for an energy embargo – and a protest is taking place in Berlin on Wednesday. But with the country still heavily reliant on Russian energy, what would the consequences of such a move be, both for the economy and the population at large? 

Here are the facts about Russian energy in Germany and the potential fallout of an end to imports. 

How dependent is Germany on Russian energy?

Highly. According to data from the Federal Institute for Geosciences and Natural Resources, Germany obtained more than 50 percent of its natural gas and 34 percent of its oil from Russia last year. Coal is another major issue: in 2021, Germany increased its imports of Russian coal to 57 percent of its overall needs, according to the Federal Statistical Office.

According to the Economics Ministry, Russian gas supplies have fallen to around 40 percent recently, while oil imports are expected to be halved to 17 percent by summer. Around the middle of 2024, Germany could become almost entirely independent of Russian energy – but this partially depends on how well the expansion of renewables goes.

READ ALSO: EXPLAINED: How Germany could end its dependence on Russian energy

What would happen to the German economy if Russian energy deliveries were stopped?

The consequences would be considerable, but economist are split on how bad it would really be.

In the worst-case scenario scenario, in which energy costs rise rapidly as a result of an embargo, there would be a “decline in gross domestic product of more than six per cent” for 2022, according to a special analysis by the Hans Böckler Foundation. That would be a greater slump in overall economic output than in the first year of the Covid pandemic. 

“There is a high probability that the German economy and probably also the European economy would fall into recession with long-term consequences,” the president of the Association of German Banks, Christian Sewing, said on Monday. 

However, economist Veronika Grimm believes that an embargo could be an effective means of establishing and stabilising security in Europe – which could reduce long-term damage after the initial shock. “The question has to be whether an energy embargo or other measures that reduce payments to Putin’s regime are necessary in terms of security policy and increase the likelihood of containing the conflict,” she explained.

The German government has so far rejected an embargo, arguing that the move would pose and existential threat to entire industry sectors in Germany – not least the chemical, pharmaceutical, glass and steel industries.

But what does this mean for regular people?

For the time being, it’s likely to mean much higher energy bills. In 2021, gas prices went up by an average of 47 percent year-on-year, meaning households with an annual use of 20,000 kilowatt hours paid around €542 extra to heat their house that year.

If more than 40 percent of the gas supply suddenly falls away – not to mention the coal and oil supply – you can expect prices in the energy market to soar further. In this case, the government would be forced to go back to the drawing board and work out a new energy relief package to soften the impact.

This would come just a few weeks after the government’s previous package of measures, which included a €9 monthly public transport ticket and a €300 energy allowance for taxpayers, among other things. 

READ ALSO:

What about energy shortages?

The Economics Ministry has previously indicated that the country has enough fossil fuels left to see it through until the colder months – but it is at this point that problems could start to arise. 

In an emergency situation, a priority system would be in place to ensure that so-called “protected consumers” were guaranteed a continued energy supply – including regular households. However, it’s not unlikely that people would be urged to drastically reduce their consumption. In fact, Economics Minister Robert Habeck (Greens) has already called on people in Germany to do their bit for Ukraine by limiting their energy use where possible. 

Robert Habeck

Economics Minister Robert Habeck holds a press conference on the expansion of wind energy. Photo: picture alliance/dpa | Michael Kappeler

READ ALSO: Why Germany has urged households and businesses to cut back on gas

What has Germany done so far to reduce its dependence on Russia?

On Monday, Habeck brought the German subsidiary of the Kremlin-linked company Gazprom under state control, citing unclear business structures and a breach of reporting regulations. The aim, he said, was to guarantee security of supply from Germany’s largest gas supplier. EU antitrust investigators last week raided Gazprom offices in Germany on suspicion the Russian state gas giant had illegally pushed up prices in Europe.

Habeck has also been off on an energy-shopping tour with pit-stops in Norway and Qatar to seek out new contracts for liquified natural gas. According to the Economics Ministry, there are also likely to be talks with Canada in the coming weeks.

Gas produced domestically currently covers about five percent of consumption, but the head of the German energy association, Ludwig Möhring, says the industry will try to expand this slightly this year where possible.

How much gas is left in German storage facilities?

Even before the war began, the levels in this country were significantly lower than in previous years. The last current total value for Germany was given by the database of the Gas Infrastructure Europe network as of April 2nd at just under 26.5 percent. In addition, more energy is withdrawn daily (529 gigawatt hours) than is newly stored (486 GWh), creating fears that situation could worsen. 

However, the government has said it will aim to replenish stores over the coming months, with the aim of filling the facilities to 90 percent capacity in time for winter. 

READ ALSO: What would Germany do if Russia cuts off the gas supply?

With all the pain caused by an embargo, the million-ruble question is whether it would have the desired impact of bringing about a ceasefire. Though the future is uncertain, some experts say it could. 

“An embargo strikes right at the heart of Russian power,” Russia and security expert Janis Kluge told Tagesschau. “Moreover, an import ban on Russian energy can be quickly lifted and thus reward a possible ceasefire.”

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UKRAINE

Rapping, breakdancing Ukrainians win Eurovision in musical morale boost

Ukraine won the Eurovision Song Contest Sunday with an infectious hip-hop folk melody, boosting spirits in the embattled nation fighting off a Russian invasion that has killed thousands and displaced millions of people.

Rapping, breakdancing Ukrainians win Eurovision in musical morale boost

Riding a huge wave of public support, Kalush Orchestra beat 24 competitors in the finale of the world’s biggest live music event with “Stefania”, a rap lullaby combining Ukrainian folk and modern hip-hop rhythms.

“Please help Ukraine and Mariupol! Help Azovstal right now,” implored frontman Oleh Psiuk in English from the stage after their performance was met by a cheering audience.

In the Ukrainian capital Kyiv, the triumph was met with smiles and visible relief.

“It’s a small ray of happiness. It’s very important now for us,” said Iryna Vorobey, a 35-year-old businesswoman, adding that the support from Europe was “incredible”.

Following the win, Psiuk — whose bubblegum-pink bucket hat has made him instantly recognisable — thanked everyone who voted for his country in the contest, which is watched by millions of viewers.

“The victory is very important for Ukraine, especially this year. Thank you from the bottom of our hearts. Glory to Ukraine,” Psiuk told journalists.

Music conquers Europe

The win provided a much-needed morale boost for the embattled nation in its third month of battling much-larger Russian forces.

Mahmood & BLANCO  performing for Italy at Eurovision 2022

Mahmood & BLANCO perform on behalf of Italy during the final of the Eurovision Song contest 2022 in Turin, Italy. (Photo by Marco BERTORELLO / AFP)

“Our courage impresses the world, our music conquers Europe!” he wrote on Facebook.

“This win is so very good for our mood,” Andriy Nemkovych, a 28 year-old project manager, told AFP in Kyiv.

The victory drew praise in unlikely corners, as the deputy chief of the NATO military alliance said it showed just how much public support ex-Soviet Ukraine has in fighting off Moscow.

“I would like to congratulate Ukraine for winning the Eurovision contest,” Mircea Geoana said as he arrived in Berlin for talks that will tackle the alliance’s expansion in the wake of the Kremlin’s war.

“And this is not something I’m making in a light way because we have seen yesterday the immense public support all over Europe and Australia for the bravery of” Ukraine, Geoana said.

British Prime Minister Boris Johnson called the win “a clear reflection of not just your talent, but of the unwavering support for your fight for freedom”.

And European Council President Charles Michel said he hoped next year’s contest “can be hosted in Kyiv in a free and united Ukraine”.

‘Ready to fight’
Despite the joyous theatrics that are a hallmark of the song contest, the war in Ukraine hung heavily over the festivities this year.
 
The European Broadcasting Union, which organises the event, banned Russia on February 25, the day after Moscow invaded its neighbour.
 
“Stefania”, written by Psiuk as a tribute to his mother before the war, mixes traditional Ukrainian folk music played on flute-like instruments with an invigorating hip-hop beat. The band donned richly embroidered ethnic garb
to perform their act.
 
 
Nostalgic lyrics such as “I’ll always find my way home even if all the roads are destroyed” resonated all the more as millions of Ukrainians have been displaced by war.

Kalush Orchestra received special authorisation from Ukraine’s government to attend Eurovision, since men of fighting age are prohibited from leaving the country, but that permit expires in two days.

Psiuk said he was not sure what awaited the band as war rages back home.

“Like every Ukrainian, we are ready to fight as much as we can and go until the end.

Britain’s ‘Space Man’

Ukraine beat a host of over-the-top acts at the kitschy, quirky annual musical event, including Norway’s Subwoolfer, who sang about bananas while dressed in yellow wolf masks, and Serbia’s Konstrakta, who questioned national healthcare while meticulously scrubbing her hands onstage.

Coming in second place was Britain with Sam Ryder’s “Space Man” and its stratospheric notes, followed by Spain with the reggaeton “SloMo” from Chanel.

After a quarter-century of being shut out from the top spot, Britain had hoped to have a winner in “Space Man” and its high notes belted by the affable, long-haired Ryder.

Britain had been ahead after votes were counted from the national juries, but a jaw-dropping 439 points awarded to Ukraine from the public pushed it to the top spot.

Eurovision’s winner is chosen by a cast of music industry professionals — and members of the public — from each country, with votes for one’s home nation not allowed.

Eurovision is a hit among fans not only for the music, but for the looks on display and this year was no exception. Lithuania’s Monika Liu generated as much social media buzz for her bowl cut hairdo as her sensual and elegant
“Sentimentai”.

Other offerings included Greece’s “Die Together” by Amanda Georgiadi Tenfjord and “Brividi” (Shivers), a duet from Italy’s Mahmood and Blanco.

Italy had hoped the gay-themed love song would bring it a second consecutive Eurovision win after last year’s “Zitti e Buoni” (Shut up and Behave) from high-octane glam rockers Maneskin.

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