The organization returns to the economic consequences of a drop in supplies, and estimates that the European Union is capable of cashing in a drop in deliveries of 70%.
Taken very seriously by the public authorities, a cut in Russian gas supplies would have serious economic consequences for European countries, which must imperatively prepare for it: this is the conclusion of an IMF blog note, published on Tuesday , which is based on three studies. While the European Commission presented its plan on Wednesday to ensure the bloc’s energy supply this winter, the blog points out that a “partial stoppage of gas deliveries is already affecting European growth, and a complete stoppage could be significantly more severe“.
Written by several representatives of the organization, including the director of the department responsible for Europe, Alfred Kammer, the note concludes that the Union will be able to withstand a drop in Russian gas deliveries “up to 70%in part thanks to lower demand driven by inflation. The Twenty-Seven will then have to rely on other sources of supply or show sobriety. All countries will not be equal in the test: some, including Hungary, Germany or Slovakia are indeed much more dependent on Moscow. A more pessimistic scenario of a complete cut in supplies would be much more difficult to manage, qualify the authors: Russia, which weighed up to 100% of the gas imports of certain nations, is indeed difficult to replace. Shortages could even be seen in the most dependent states, according to the IMF, going up to “40% of gas consumptionand prices would rise, further increasing inflation.
Looking at different scenarios, the experts point out that four European countries – Hungary, Slovakia, the Czech Republic and Italy – would particularly suffer from a complete interruption of deliveries, seeing their growth strongly affected, “the concomitant fall in gross domestic product of up to 6%“. These countries are also among the most vulnerable in the event of supply limitations, along with Croatia. Berlin would also see its growth limited by several percent, while other capitals, including Paris, Athens, Dublin and Luxembourg would suffer less. France, Belgium and the Netherlands, thus, “could fitto the situation, in particular thanks to imports of liquefied natural gas (LNG), notes the document.
A necessary preparation of the populations
The authors dwell longer on the German example. A disruption in supplies could lead to gas shortages equivalent to 9% of national consumption, in the second half of the year, and up to 10% in 2023. The consequences would probably be borne by companies, in particular during coming winter, and prices would rise sharply. “Economic impacts can be significantly reduced“, up to a third, or even three-fifths, thanks to energy saving measures, including on the side of households or companies consuming large quantities of gas, advance the documents.
Everything will therefore depend on the Russian position, on the one hand, and on the way in which the States react and help each other, on the other hand. The authors also emphasize that the policy of freezing gas prices, as in France, is not necessarily the best:A better alternative would be to allow greater transmission to encourage conservation while providing targeted compensation to households that cannot afford higher prices.“, they plead.
In any case, populations like States must prepare for the worst. This is also the ambition of the European Commission, which is asking members in particular to voluntarily reduce their gas consumption by 15% from August 1 and until March 31, 2023. In France, the executive is taking the threat seriously: at the beginning of July, Élisabeth Borne thus judged the hypothesis of a break in Russian supplies “credible“. For the time being, the efforts of the European bloc remain insufficient, according to the International Energy Agency, which saidworried about the coming months“.
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