In a forest of gas pipes, a Little Red Riding Hood meets not the wolf, but the Russian bear, on the cover of The Economist of July 16, titled “The winter peril that awaits Europe”. The British weekly has not lost its time compass due to summer overheating. He explains : “If you’ve spent the last few days grilling on a Mediterranean beach or roasting on the streets of Berlin, London or Rome in the heat of the heat, the cold is probably the least of your worries. Yet, make no mistake, the coming winter promises to be harsh and deadly, blamed on the accelerating energy crisis, with Vladimir Putin suffocating Russian gas supplies.”
A test for European unity
If the European Union has known other “calamities” for ten years, starting with the euro crisis in the early 2010s or the migrant crisis in 2015, “the energy shock of winter 2022” should serve as a test for “the unity and determination of the continent”.
Even if Europeans do not yet feel all the effects, “all lights are red”. Gas prices are again almost as high as in March, the peak reached just after the invasion of Ukraine by Russia. The governments in France and Germany “preparing to bail out” energy companies in difficulty (EDF and Uniper). “Even the most seasoned energy traders, accustomed to wars and coups, are beginning to worry”notes the weekly.
The energy crisis has been brewing since the start of the conflict in Ukraine. Russia very quickly threatened to cut off the gas tap in return for the economic sanctions taken by Western countries against the invasion of Ukraine. The gas represents “a quarter of the continent’s energy demand and Russia provides a third of it”recalls the liberal weekly.
The heatwave effect
If Russia can live without exporting its gas to Europe, the reverse is much less true. Until last week, before the Nord Stream 1 pipeline was shut down for maintenance, “it looked like Europe might escape the worst, thanks to rising LNG shipments from America and elsewhere”. The reservoirs, which were only 26% full in March, were “at more than half in June and on track to reach 80% in November, the minimum necessary to get through the winter”. The situation got even worse with the “Norwegian gas field failures” and the heat wave, which increases consumption to supply air conditioners.
The Economist paints a bleak picture of the economic outlook for Europe: sluggish growth, rising inflation, social instability… Politically, the sequence could be disastrous, unless the European Union succeeds, “as with vaccines, to overcome national divisions”.