The worst case scenario for Europe's energy crisis
(Baonghean.vn) - The complete shutdown of Russia's Nord Stream gas pipeline has made the worst-case scenario for European countries a reality. This is the author's opinion in an article written for The Wall Street Journal.
Journalists note that after the announcement of the complete closure of the Nord Stream gas pipeline, the price of natural gas and electricity first increased by a third, then by more than 10%. This caused the euro to fall to a 20-year low and in the future, prices will rise to historic highs, posing the risk of higher inflation, poorer consumers and putting pressure on energy-intensive industries that are experiencing a wave of plant closures.
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| Nord Stream pipeline. Photo: AP |
European countries are trying to soften the energy blow from the loss of Russian gas supplies. Germany has extended the operation of two nuclear power plants that were previously shut down and allocated $6.5 billion to support vulnerable households and businesses. France said it would resolve a major bottleneck in Europe’s gas flows, allowing it to export gas to Germany in exchange for electricity supplies.
"The main goal is to limit the wild moves in the electricity market that are forcing European businesses to close. Options include temporary measures to limit gas import prices, including the price of gas used to generate electricity, as well as limiting the profits of renewable energy, nuclear and hydropower companies with low operating costs. Income exceeding a certain level would be recovered and redistributed to consumers," - WSJ quoted the collected documents.
On September 2, G7 finance ministers confirmed plans to introduce a "price ceiling" on Russian oil and called on "all countries" to join the initiative. Earlier, European Economic Commissioner Paolo Gentiloni said that the European Commission's goal is to implement the price ceiling until December 5, 2022 for crude oil and February 5, 2023 for oil products from Russia./.