Russian gas, what economic consequences for the stop?

S&P RG and Confindustria reveal the disastrous consequences of the energy crisis

The worst case scenario also seems the most likely one and is unfolding: Gazprom has already cut off gas supplies from Russia and may not reactivate them. S&P RG and Confindustria reveal the disastrous consequences of the energy crisis. With the excuse of carrying out a new maintenance on the Nord Stream 1 compressor, Gazprom has already cut off gas supplies since 31 August and there is no certainty about a restart of the flows.

The stop to Russian gas complicates storage activities in European countries, remembers France has already launched a gas rationing plan but the European Commission plans a 15% reduction in gas consumption across Europe.

This is the context in which the S&P Global Ratings report, which analyzes the economic consequences for the total stop of gas flows from Russia, must be read.

In the event of a total blockade, the economic consequences would be devastating for the latter, leading to mandatory rationing throughout the EU, a slowdown in the growth of the eurozone with prolonged peaks in inflation. And Germany – which according to 2020 data depends almost 60% on Russian gas – would fall into recession.

Dangerous situation for Italy, which “suffers less” than Germany thanks also to the ability to diversify its energy sources with more than 3/5 of the gas coming mainly from Algeria, Libya and Azerbaijan.

Confindustria also believes that a total stop of gas supplies from Russia would entail “a shock on volumes and prices with a heavy impact” on the Italian economy. Predicting a shortage of supply equal to about 18.4% of Italian consumption, economists estimate a negative impact of -1% of GDP between spring 2022 and winter 2023 which could worsen up to -2.2% in the case of further increases in energy prices.