Russia gas halt will send Germany into recession: German institutes
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Germany is walking itself into an economic crisis.
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Container Terminal Tollerort of Hamburg Hafen and Logistik AG ports in Hamburg, Germany, Friday, March 20, 2020 (AP)
Germany's most prominent economic institutes are warning that an immediate end to Russian energy imports would lead Germany to a "sharp recession" next year.
Berlin, although highly dependent on Russian gas, has resisted calls for a European boycott as a response to the situation in Ukraine.
If Russia or Germany were to close the taps this month, Germany's economic growth will be limited to only 1.9%, and this will push the European superpower into a recession by 2023. Thus, the economy will shrink by 2.2%, according to the predictions.
Read more: Germany refusing Russian energy to lead to inflation increase by 2.3%
Germany will not rise above the impact of a Russian gas boycott any time within the next two years, according to DIW, Ifo, IfW Kiel, IWH, and RWI.
Without any boycott of Russian gas, the series of current events in Europe are already slowing down Germany's recovery from the sustained economic losses of the COVID-19 pandemic, according to the institutes.
Before February 24, a third of German oil imports, 45% of coal purchases, and 55% of gas imports came from Russia.
Russia's lower house proposes suspending gas supplies to EU countries
On Sunday, Crimea's representative in Russia's lower house of parliament, Mikhail Sheremet, has urged that Moscow restrict gas supplies to European Union member countries.
In an interview for Sputnik, Sheremet stated that the EU is "continuing its disrespectful and humiliating policy towards Russia. In response to their unfriendly actions, I think we should respond with tough sanctions – temporarily halt energy supplies until the European counterparts realize that an aggressive policy towards Russia is harmful and punishable."
He added that the EU, by choosing the US as its "best friend", made a "fatal mistake".
According to the European Commission, Russia's gas imports to the EU in 2021 amounted to nearly 45% of gas, 27% of crude oil, and 46% of coal.
