Russian Sanctions Spell Certain Doom for Germany

The Russia-Ukraine war is having serious consequences for the economies of European nations and some are faring far worse than others.

Economic powerhouse Germany is one of those feeling the sting, as the country relies heavily on Russia oil and gas to survive.

Sanctions have been imposed on Russian oil and gas from the U.S and other western nations. Some European countries, however  are reluctant to drop Russian imports as there is currently no guarantee they’ll find the supplies they need if they break away from Russian imports.

The Biden administration made it their mission during the first week in office to shut down American oil and gas production and this is also causing uneasiness within Germany – who won’t be able to rely on America to supply the volume they need.

Without the steady flow of Russian oil and gas, Germany’s economy will completely collapse, according to Martin Brudermuller, CEO of Germany’s larger chemical producer – BASF SE. 

Brudermuller warned that limiting or cutting the imports from Russia would send Germany into the most “catastrophic” economic crisis since World War II.

The CEO made these remarks during an interview with Frankfurter Allgemeine newspaper, while the German population was warned of coming shortages of natural gas.

Germany made Russia’s list of “unfriendly” countries and Brudermuller said that “Germany could be independent of Russia gas in four to five years,” but conceded that, “LNG imports cannot be increased quickly enough to replace all Russian gas flows in the short term.”

Brudermuller also added that, “it’s not enough that we all turn down the heating by two degrees now,” since “Russia covers 55 percent of German natural gas consumption.” He explained that if Russia’s gas flows disappeared overnight, “many things would collapse here” since “we would have high levels of unemployment, and many companies would go bankrupt. This would lead to irreversible damage.”

“To put it bluntly: This could bring the German economy into its worst crisis since the end of the Second World War and destroy our prosperity,” Brudermuller continued. “For many small and medium-sized companies, in particular, it could mean the end. We can’t risk that!”

The question asked by the newspaper and Brudermuller’s response:

And what if, for example, Putin’s demand for payment in rubles leads to an immediate stop in gas supplies?

“A delivery stop for a short time would perhaps open the eyes of many — on both sides. It would make clear the magnitude of the consequences. But if we don’t get any more Russian gas for a long time, then we really have a problem here in Germany,” he noted.

“At BASF, we would have to scale back or completely shut down production at our largest site in Ludwigshafen if the supply fell significantly and permanently below 50 percent of our maximum natural gas requirement. Minister Habeck has already activated the early warning level of the gas emergency plan,” he continued.

It seems Putin may have the upper hand as the countries who are trying to destroy him through sanctions, are feeling far more negative effects than Russia.