Economy Minister Robert Habeck announced on Thursday that Germany would move to Stage Two of its three-stage plan emergency plan. This is a war preparation stage. It means Europe’s largest economy now sees a high risk of long-term gas supply shortages. That’s because Germany, which gets a third of its gas from Russia, is facing a looming supply squeeze. Gazprom, the Kremlin-controlled gas giant, has shut down the Nord Stream 1 pipeline. In recent years, the maintenance-related shortfall in supplies via Nord Stream was compensated by increased flows through Ukraine or Poland. But not this time.
While the company blamed this on a delayed repair to pipeline infrastructure (because of western sanctions), it’s obviously a “political decision” to designed to drive up prices and keep Germany from sanctioning Russia for its invasion of Ukraine.
The shortages, and escalating costs have forced Germany to enter the second stage of a gas alert system that would place its market on a war footing.
According to Germany’s emergency gas plan*, the alert level phase is triggered when there is a “disruption of gas supply or exceptionally high gas demand which results in significant deterioration of the gas supply situation occurs but the market is still able to manage that disruption or demand without the need to resort to non-market-based measures.”
This phase does not call for state intervention measures. These kick in at the “emergency phase” of stage three, if the government judges that market fundamentals no longer apply. CNBC
This third phase will introduce gas rationing.
For those of us who remember the phoenix-like industrial rise of Germany through the 60s, 70s, and 80s as it shook off the beating it took from WWII (and sucked up all the aid the victors poured in to ensure it never went to war again) it is incredible to see that it has backed itself into a corner and is at the mercy of yet another mad man.
Who’d have thunk? Oh that’s right, Orange Man.