The German central bank, Bloomberg, reported that the economy will decline by 3% in 2023 if Russian gas stops.
Germany raised the alert level in its three-phase gas emergency plan, last Thursday, June 23, due to a drop in Russian supplies.
Accordingly, Germany is preparing to move to the second level of the contingency plan, in light of the high risks of a short-term gas supply, allowing utilities to pass high prices to industry and households, thus reducing demand.
In late March, Germany activated the first level of an emergency plan to counter the lack of Russian gas supplies. This plan includes strict monitoring of daily flows and a focus on filling gas tanks.
The decision to move to the next stage was under consideration, since Russia's Gazprom began reducing flows through the Nord Stream 1 pipeline to only 40%.
Germany is looking to use the Nord Stream 2 pipeline to enhance the capabilities of liquefied natural gas, in light of the continued deterioration of relations with Russia; The German government intends to convert parts of the Nord Stream 2 gas pipeline to a connection to a liquefied natural gas station on the Baltic Sea coast, according to Reuters.
And last Thursday, German Economy Minister Robert Habeck said that his country had raised the alert level on gas after Russia cut supplies.
He added that gas is now a scarce commodity in Germany.
Germany will take emergency measures to secure its gas supplies in the face of reduced Russian deliveries, including increased coal use, the government announced.
The Ministry of Economy said in a previous statement: "In order to reduce gas consumption, less gas must be used to generate electricity. Consequently, coal-fired power plants will have to be used more."
Russia's state-owned Gazprom has reduced the flow of gas through the Nord Stream 1 pipeline across the Baltic Sea in recent days.
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- Agencies