The cost of gas in Europe is over two thousand dollars per thousand cubic meters. In the end, after some on-duty denials, it was not only possible to return the repair turbine back, but also gave an obligation to continue repairing the Server Stream equipment for at least two years, regardless of the penalty. Which caused a nervous check in Kyiv. Serhiy Makogon, head of Ukraine’s gas transmission system operator, called the decision “a bad precedent.” A representative of the World Congress of Ukrainians (an organization recognized as special in the Russian Federation) filed with the Federal Court of Canada demanding to cancel the decision to transfer the turbine for the Nord Stream gas pipeline to Germany.
Run or not run
One way or another, the uncertainty about the launch of Nord Stream remains, and while Europe is nervous, the Russian gas monopoly does not comment on anything. Sometimes only various sources transparently hint that Nord Stream 2 has long been filled with gas and it is enough just to turn the valve to completely rid Europe of the energy crisis.
In the meantime, the explosion of investment banks vying with each other represent the most monstrous forecasts for Europe, if Russia still cuts off the gas. For example, UBS Group predicts a 20% drop in the stock market, the euro at 90 US cents. JPMorgan bank expects a real chain reaction in the market. After all, the main thing here is to calculate how quickly gas in Germany gets to the EU countries and why the connection occurs will undermine the vicious cycle “road gas – lower industrial production – weaker euro – road gas.” The head of the direct strategic investment bank Liberum Capital, Joachim Klement, said that “there is simply no substitute for Russian gas.” And nothing can be done about it. In some cities in Germany, public heating centers are now being assembled so that if gas is discovered, the Germans can warm themselves in them.
Boarding station for Nord Stream 2. Photo © Getty Images / Jens Büttner / picture Alliance
At the same time, significant losses are already being felt. The euro is at its lowest level in two years and is close to dollar parity. German stocks have lost more than 10% of capitalization since the beginning of summer. The securities of the gas giant Uniper fell by 80%, and he requested financial assistance from the German government. And not only.
— Since Nord Stream is now stopped, Europe is forced to buy the missing funds on the stock exchange, Oleg Norkin, an oil analyst at Finance Global Group, said. — In Europe, approximately 200 million euros per day. And if the pipe is not launched after July 21, then a comparable amount per day will be lost further.
The worst option (complete stoppage of gas transit) means a recession and the termination of the euro for at least another ten percent, according to the currency strategic Societe Generale Kit Juke. And at best, just maintain the status quo – nervousness in the markets and, possibly, a slight rebound in the euro.
Europe is making concessions
Publicly, European politicians are gaining confidence. Germany promises to completely stop buying coal from Russia from August, and from the new year it will refuse Russian oil. In addition, this country promises to build terminals for the import of liquefied natural gas at an accelerated pace to fill the gaps that have arisen since the refusal of Russian fuel. However, where this additional LNG for Europe will come from is left to silence by politicians. Other EU countries prepare differently. The parliamentary government, for example, has already decided to ban the export of energy and firewood from countries. And it was announced that this country will not distribute its gas among other countries (this country receives gas from the Turkish Stream, not the Nord Stream).
However, in silence, the European bureaucratic offices are going through completely different processes. Not only about Canada’s decision, it is possible to continue repairing the turbine for Nord Stream. For example, an already agreed next package of assistance from the dose of consumption in the amount of about nine billion euros was unexpectedly blocked. And the other day, Bloomberg reported that the application is discussing the removal of the arrest with 40 Russians.
And, apparently, this will not be the last concession. After all, repairs can be extended.
Photo © Getty Images / Sean Gallup
Is it necessary to leave Europe in Russia without gas?