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The German Government declared this Thursday, June 23, the alert in its emergency plan on gas due to the decrease in supply from Russia and high prices, while assuring that the security of supply remains guaranteed (for now).
To German companies and households, the Government launched a warning this Thursday, accompanied by a recommendation: painful cuts in gas supply could be forthcoming and it is necessary to save the input for the winter season.
Having entered the second of three emergency phases, the country was much closer to declaring rationing at any time, a phase in which the market would require state intervention.
“Gas is from now on a scarce commodity,” Economy and Climate Minister Robert Habeck said at a press conference, adding that, although the security of supply is currently guaranteed, there is no need to be overconfident.
Germany raised its alert level in order to continue guaranteeing gas supply, a mechanism that places the country close to rationing measures at a time when Russia has reduced its deliveries through the Nord Stream pipeline by 60%. #AFP pic.twitter.com/UuRYinTAhs
— Agence France-Presse (@AFPespanol) June 23, 2022
Lower gas flows from Russia prompted warnings this week that Germany could slide into recession if flows were to stop altogether, even as storage tanks are 58% fuller than last year.
The biggest concern is winter, the time of greatest consumption. “It’s summer, but winter will come,” Habeck warned, stressing the need to take action now to get to the cold months with full gas reservoirs.
An intermediate phase that sets off the alarms
Since the end of March, Germany was in stage one of the emergency plan, which is early warning. This included tighter control of daily flows and a focus on filling storage facilities to save in the future.
The second level, the alert level, according to the European Union regulation, is declared when there is an interruption in the gas supply or an exceptionally high demand that causes a considerable worsening of the supply.
In theory, this new phase would allow utilities to pass on high prices to industry and households to help reduce demand. However, the Executive made an exception in this case.
The final emergency stage occurs when the supply definitely does not meet the demand and state intervention must be activated in the face of possible rationing. In general terms, the supply to industry is reduced, while homes and critical institutions, such as hospitals, continue to receive what little gas is available.
In this regard, the president of the German Confederation of Chambers of Industry and Commerce (DIHK), Peter Adrian, stated in a statement that “although the gas supply remains guaranteed in the short term, companies in all sectors are very concerned “.
Germany accuses Russia of declaring an “economic war”
“We must not fool ourselves: the gas supply cut-off is an economic attack on us by (Russian President Vladimir) Putin,” the German economy minister said in a statement.
In response, Kremlin spokesman Dmitri Peskov stated that “Russia strictly complies with all its commitments and, being a reliable supplier for many decades to Europe, naturally watches over this prestige very carefully.”
The supply of gas to Germany has been reduced in what the West sees as retaliation for the cascade of sanctions with which Russia was punished for its invasion of Ukraine.
The Kremlin assured that its motivations are “technological”, since one of the turbines of the Nord Stream 1 gas pipeline, responsible for most of the flows from Russia, is under repair.
With Reuters, EFE and AP
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