The Kremlin unsurprisingly appears to be exercising its political and economic leverage over Europe "by offering a simple solution to the feared winter shortage: approve the controversial Nord Stream 2 gas pipeline that will tighten Putin’s grip on European energy supply. The pipeline, which bypasses Ukraine and is vehemently opposed by the US, is finally ready to pump gas into Europe but is awaiting approval from German regulators.
“Get Nord Stream 2 operational or else: that’s in the end the signal they sent,” says Prof Andreas Goldthau at the Institute For Advanced Sustainability Studies.
Jacob Nell, Morgan Stanley economist, warns the gas price crisis could hit growth in Europe by squeezing disposable incomes and hurting energy-intensive businesses.
He says the price surge risks becoming more damaging if Russian supply fails to pick up following the approval of Nord Stream 2 or “a cold winter with high gas and power demand”.
The gas price crisis has revealed the fragility of the region’s energy supply and the need to beef up resilience. Governments across Europe have rushed to soften the blow on consumers with multibillion-euro packages to protect households.
Europe is heavily dependent on Russian gas for energy – and is set to become even more reliant as Nord Stream 2 arrives.
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