Billions in losses, up to 5.6 million jobs affected: stopping Russian gas would have dramatic consequences

Created: 06/30/2022, 16:27

By: Thomas Schmidtutz

A possible delivery stop for Russian gas would hit the German economy with full force.

This is shown by a Prognos study for the Association of Bavarian Business (vbw).

Munich - A short-term halt to Russian natural gas imports would have dramatic consequences for the German economy.

This is the result of a study published on Tuesday by Prognos AG on behalf of the Bavarian Business Association (vbw).

According to this, German economic output could shrink by a total of 193 billion euros in the event of a supply stop for Russian gas.

In addition, a total of "around 5.6 million jobs would be affected nationwide," said vbw CEO Bertram Brossardt at the presentation of the study on Tuesday in Munich.

In the study, the authors examined the possible consequences of a supply disruption for Russian gas on July 1, primarily evaluating individual production processes and their impact on neighboring production stages.

After that, the glass and steel industries in particular would have to adjust to drastic setbacks.

"We have to assume that the added value will drop by almost 50 percent," said Brossardt.

In the chemical, ceramics, food and textile industries as well as in printing, there was a risk of a loss of value of "over 30 percent".

Delivery stop for Russian gas: Association sees dangerous domino effects

In addition, there would be indirect consequences for downstream areas.

"The natural gas bottlenecks have a domino effect," said the vbw boss.

Because of the closely intertwined production and supply chains, the effects, with a drop in added value of a further 144 billion euros, are a good three times greater than the industries directly affected, warned the vbw general manager.

In view of the war in Ukraine, concerns are growing in Europe about a complete stop to gas supplies from Moscow.

In mid-June, the Russian gas giant Gazprom reduced delivery volumes by 60 percent.

In mid-July, the Nord Stream 1 gas pipeline is to be serviced as scheduled.

Then the gas taps must first be turned off completely.

However, more and more observers expect that the Kremlin will no longer start the delivery even after the maintenance.

In view of the scenario of a complete supply stop, Brossardt spoke out in favor of the targeted use of the available gas quantities.

The aim must be to make the German economy independent of Russian gas supplies "in the shortest possible time".

At the same time, he again called for more speed in the energy transition.

With a rapid expansion of renewable energies, electricity prices would be dampened in the long term.

This would allow Germany "to further free itself from one-sided dependencies in the energy sector," said Brossardt.