Germany is facing the collapse of Lehman Brothers in the energy market, and this could trigger a domino effect that leads to a severe recession if the gas-dependent economic power of the European Union is completely cut off from energy supplies from Russia.
Economy Minister and Deputy Chancellor Robert Habeck said Friday that Europe’s largest economy will have to shut down some industries if gas supplies run out in winter.
“Companies will have to shut down production, lay off workers, supply chains will collapse, people will have to borrow money to pay their heating bills, people will be poor,” he said, according to DW.
A Green Party politician warned that there could be “a kind of Lehman-Brothers effect on the energy market” that could spread to utilities, industrial and commercial companies, and “there is a domino effect that will then lead to a serious recession.”
What Habek is talking about is the defunct financial services company Lehman Brothers, whose bankruptcy marked a turning point in the global financial crisis of 2008. The impact of Lehman’s collapse was the effect of its balances with other banks, insurance companies, hedge funds and other financial institutions. Many believe that the US government made a serious mistake by allowing Lehman to collapse, and that the collapse exacerbated the crisis and the economic difficulties that followed. But others said it was necessary not to bail out Lehman, and it really did improve the financial system and prevent economic collapse.
Germany has come a step closer to gas rationing after the country launched a second emergency powers war amid the ongoing crisis. https://t.co/dukZwhQ5LR
– Breitbart News (@BreitbartNews) 24 June 2022
Also on Friday, Klaus Müller, head of the energy regulator for the Federal Grid Agency (Bundesnetzagentur), said he urged the German population to reduce energy consumption to mitigate the impact of a possible Russian shutdown after natural gas deliveries from Russia via Nord to Germany. The Stream One gas pipeline is already down 40 percent.
“Everyone in the industry and in the household can contribute to this, and yes, that includes jumpers, shower heads, a slight reduction in heating, it all helps,” he said, adding that consumers are set for a two or two. two. . It will triple its gas bill in the coming months.
Mueller on Thursday estimated that the country could live without Russian gas for less than three months in the winter with reserves, saying: then the storage tanks are empty.
The dire situation for Europe’s largest economy came after repeated warnings from figures like former President Donald Trump, whose warnings about Russia’s over-reliance on energy resources were ignored. The problem can also be seen as an accusation of the country’s “greening” initiative, especially in the last decade when Germany increased coal production to fill dwindling supplies.
Despite calls by organizations like the International Energy Agency not to phase out nuclear power, the German government seems determined to continue the Merkel-era policy of phasing out all reactors next year.
But Germany is not alone in returning to coal-fired power in Europe: both Austria and the Netherlands have announced that they will begin mass-burning coal again. Italy, which is also highly dependent on Russia’s energy, is expected to return to coal-fired thermal power plants to meet its energy needs.
Germany’s finance minister has urged the country to continue using nuclear power to alleviate the ongoing energy crisis, despite being called “backward” by an energy czar in the country. https://t.co/NS93Fu8IyA
– Breitbart News (@BreitbartNews) 23 June 2022
Source: Breitbart
