If Russia cuts gas supplies to Europe completely, the EU risks an economic decline to 1.5% of GDP in the worst-case scenario. The European Commission believes that this may happen if the upcoming winter is very cold and member states do not take sufficient energy precautions.
According to Bloomberg News, the European Union administration will warn on Wednesday that in an average cold winter, the economic contraction could reach 0.6 to 1% if Russia turns off the gas taps completely. There is speculation about this because it is not certain that Russian energy group Gazprom will restart turbines that have been repaired between Russia and Germany. The shutdown of the Nord Stream 1 pipeline may be in response to European Union sanctions against Russia.
On Wednesday, the commission is expected to present proposals to member states on energy-saving policies. The Commission said that timely precautions to reduce gas demand this winter could ease the suffering. It is not yet clear whether the proposals will be binding or if they will remain mere recommendations. The 27 countries have already agreed to fill their gas stocks to 80 and if possible 90 percent by November. This in and of itself seems important.
If the Russian gas tap really shuts down in July, the November replenishment of reserves will stall between 65 and 71 percent, the commission estimates, according to Bloomberg. There are already a dozen member states that are completely cut off from Russian gas or receiving less than before.
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