Lindner warns of effects
Stop of Russian energy imports “on the table”
03/10/2022, 5:50 p.m
Vladimir Putin is also financing the war in Ukraine with money from energy exports to Germany. But stopping deliveries would hit Germany hard because of its dependence on Russia. Finance Minister Lindner still does not want to rule out such an embargo.
Federal Finance Minister Christian Lindner has not ruled out stopping energy imports from Russia depending on further developments. “It is on the table to end cooperation in the energy sector as well,” said Lindner in Berlin after talks with the Spanish Minister for Economic Affairs, Nadia María Calviño.
For the time being, however, he thinks it would be better to use other instruments for the sanctions. “We have imposed very severe sanctions against Russia” and “work is being done to further intensify the pressure,” said Lindner. It is about “involving other people who support the Putin system” and also about measures against Belarus and against circumvention through the use of cryptocurrency. The aim is to “hit Russia” and “impose the highest possible price” on the country.
“But we have to face the fact that the tension with Russia could possibly last longer,” the finance minister said. “We have to consider the sustainability of severe sanctions,” he warned against an immediate cap on gas, oil and coal imports. He currently doesn’t think this is “proportionate” because of “a long-term weakening of our own position”, also with a view to short-term effects against the Russian ruler Vladimir Putin.
SPD leader Lars Klingbeil made a similar statement. He also does not rule out an import stop for Russian gas and oil. “We have always said: All options are on the table. (…) We need more printing options,” he told the news portal “Pioneer”. “I’m not completely ruling it out.” However, he was “very skeptical” about such a decision. “It’s one of the biggest pressure opportunities we have,” he said. However, a waiver of Russian gas and oil could cause “very serious damage” to consumers and the economy as a whole.
Lindner also announced, as before, Federal Minister of Economics Robert Habeck, that dependence on Russia in the energy sector should be reduced “as quickly as possible” – by building reserves, developing new sources of supply and expanding renewable energies. “An examination of our country’s energy policy concept, for example in the use of coal, could increase sustainability”.
An energy embargo threatens an economic crisis
According to government circles, an immediate ban on imports of Russian energy could result in a serious economic crisis. “The most likely scenario is that a short-term delivery stop will cause an economic crisis in which the gross domestic product could collapse as much as in the Corona crisis in 2020,” says a scientific study published by the Ministry of Economic Affairs.
“There is also a threat of dramatic social consequences,” it is further quoted. During the Corona crisis in 2020, economic output fell by 4.6 percent. The study by the economists Sebastian Dullien and Tom Krebs led by the ministry contradicts assessments by the Leopoldina Academy of Sciences, which assessed the consequences as manageable.
Russia’s exports of fossil fuels contribute significantly to the financing of the Russian state budget. Therefore, there are pressures from different quarters to end these imports into the EU. The US has already done this; however, they also previously imported far less energy from Russia.
Lindner again emphatically condemned the Russian war of aggression against Ukraine. The attack was carried out because the Ukrainian people “decided in free self-determination for democratic values and an open social order”. “We salute the Ukrainians who are fighting so bravely for their right to self-determination,” said Lindner.