The suffering in Ukraine is unbearable. For the first time in decades, there is war in Europe. In addition to its economic consequences, violence may well spread to other countries if this situation is not managed with the utmost care and foresight by all parties.
In recent weeks, calls for a German gas embargo have grown louder and are by now discussed daily in German (and Western) media. The West would like nothing more than to severely damage the militaristic regime that runs Russia and finances itself with the sale of natural resources. Gas from Russia to Europe is shipped via pipelines that cannot be rerouted on short notice, which is why a gas embargo would deal a delicate blow to Putin’s finances that are already under severe strain from a diverse set of Western sanctions.
However, a German gas embargo would be a mistake. There is no indication that it would help end the war. Putin started this war on ideological grounds and obviously does not sufficiently care about the economic damage that it inflicts on the Russian state and population. Most of Russia’s revenues historically don’t come from the sale of gas, but oil. Russia will be able to sell its oil in the global market independent of Western sanctions. And no matter how low state revenues are, they are high enough to finance this terrible war for a long, long time if Putin chooses to do so.
Also, a German gas embargo would deal an even more severe blow to Germany than to Russia, amounting to a Kamikaze stile tactic to damage another country. Germany’s standard of living is powered by its industrial complex that competes in the global market. If the country decides to stop importing natural gas, this industrial complex will almost immediately ground to a halt, interrupting complex value chains, and even destroying them. The extent of the destruction cannot be forecasted reliably. The damage may be reversable, it may be permanent; but in any case, it would be enormous and wide-ranging.
Germany has decided to base its standard of living on the import of natural gas from Russia, nuclear energy from France, oil & coal from global markets and to an increasing extent the production of homegrown renewable energy. If it now decides to interrupt some of these energy flows, it sends a clear and unmistakeable signal that it cannot be relied upon to adhere to even the most fundamental principles of a successful economy, thereby endangering not only its own standard of living but also that of Europe. And as we all now, poverty is a terrible guarantor of piece.
Comments