Daniel Statement
Daniel Statement
Europe’s economic recession seems to have been confirmed, with Russia constraining natural gas supplies to the area and heavy industries facing tight rationing in the coming months. So, how have the results influenced Germany’s economic stability? Let us investigate Germany’s dependency on Russia.
First let’s dive into the backstory of Germanys economic recession
On Monday, a top German bank lobby warned that if imports or deliveries of gas and oil from Russia were to be interrupted, the nation would be thrown into a catastrophic economic depression. Russia meets the majority of Europe’s energy demands, and major financial institutions throughout the continent have lately expressed concern about the likelihood of a disruption in energy supply caused by Russia.
As president of Germany’s BDB bank lobby, Christian Sewing, CEO of Deutsche Bank, said that German banks expected a significantly slower growth rate of roughly 2% this year due to the continuing situation in Ukraine. “Stopping the importation or delivery of oil and natural gas from Russia will exacerbate an already perilous situation. If this occurs, a severe economic crisis in Germany would be very hard to avoid.” The sewing firm informed the press.
According to his comments, “the subject of government assistance measures for firms and industries would therefore become much more significant.” The European Central Bank was once again asked to intervene in order to avert additional price spikes. He said that the European Central Bank should terminate its net asset purchases as soon as feasible and send a signal via interest rate adjustments.
Moving forward, what do we know about Russia’s reliance?
With Russia facing a slew of international sanctions as a result of its conflict in Ukraine, gas is one weapon it may use against Europe. The area formerly got around 45% of its yearly supply from Russia, and despite urgent efforts to find alternatives, such as US liquefied natural gas, it is unable to replace its Russian hydrocarbons quickly enough. Analysts expect a terrible winter for the Continent unless the situation improves rapidly.
“High energy prices are dragging Western Europe towards recession,” stated S&P Global Market Intelligence in research published on Sunday. “Our July prediction already includes slight second-quarter real GDP reductions in the United Kingdom, Italy, Spain, and the Netherlands.” With inflation surging, central banks are quickening the pace of monetary policy tightening. While a comeback in tourism and consumer services may provide a minor boost to the area in the summer quarter, another setback is predicted in the fourth quarter due to unstable energy supply,” the report noted.
Well, that marks the end of our video today. We hope you loved it. Make sure to hit that subscribe button on your way out. Thanks for watching.
