Germany labels Russian gas cuts an ‘economic attack’

Germany triggered the “alarm stage” of its emergency gas plan this week in response to falling Russian supplies but stopped short of allowing soaring energy costs to hurt customers in Europe’s largest economy.

The measure is the latest escalation in a standoff between Europe and Moscow since the Russian invasion of Ukraine that has exposed the EU’s dependence on Russian gas supplies and sparked a frantic search for alternative energy sources. The step is largely symbolic, signalling to companies and households that painful cuts are on the way. But it marks a major shift for Germany, which has cultivated strong energy ties with Moscow stretching back to the Cold War.

Lower gas flows sparked warnings this week that Germany could fall into recession if Russian supplies halted altogether.

“We must not fool ourselves: the cut in gas supplies is an economic attack on us by [Russian

President Vladimir] Putin,” economy minister Robert Habeck said, adding Germans would have to reduce consumption.

Gas rationing would hopefully be avoided but could not be ruled out, Habeck said.

Russia has denied the supply reductions were premeditated, with state supplier Gazprom blaming a delay in return of serviced equipment caused by Western sanctions.

Under its phase 2 plan, Berlin will provide a credit line of €15bn (about R250bn) to fill gas storage facilities and launch a gas auction model this summer to encourage industrial gas consumers to save gas.

The government activates the second “alarm stage” of a three-stage emergency plan when it sees a high risk of long-term supply shortages. It theoretically allows utilities to pass on high prices to industry and households and thereby help to lower demand. —