EU needs at least 3 years to replace Russian gas: Fitch
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If Moscow cuts off gas supplies, Slovakia, Hungary, and the Czech Republic will suffer the most as per the International ratings agency Fitch.
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Russian gas flows to Germany via the undersea Nord Stream pipeline were reduced by up to 60%.
International ratings agency Fitch said, in a report published on its website, that if Russian gas imports are abruptly cut off, it could take the EU more than three years to replace them.
“A sudden cessation is not Fitch’s base case but is a risk. Bulgaria and Poland have already been cut off and supplies to other EU members have been reduced. Supply and infrastructure constraints mean it could take the EU more than three years to offset a full loss of Russian gas supply,” the agency stressed.
Fitch warns that if Russian supplies are cut off, EU countries will face "a significant macro shock," most notably negative economic growth and higher inflation.
Slovakia, Hungary, and the Czech Republic, according to the agency, are the most vulnerable to a sudden shutdown because they rely on Russian gas the most due to a lack of alternative sources.
Poland, Lithuania, and Romania are mostly safe because they have secured alternative supplies or have domestic production, the report added.
It is worth noting that Bulgaria, Poland, and Finland refused to comply with Russia's new ruble-based gas payment mechanism in April, prompting Gazprom to cut off supplies to them.
Earlier this month, Russian gas flows to Germany via the undersea Nord Stream pipeline were reduced by up to 60% due to technical issues caused by Western sanctions against Moscow.
It is worth noting that The Wall Street Journal reported Monday that German chemicals giant BASF - with nearly 40,000 employees - may be forced to halt production at the world's largest chemicals plant in Ludwigshafen due to a lack of cheap and abundant Russian gas.
In response to the crisis, Germany's government has activated the second "alarm" phase of its three-tiered gas emergency plan.
Last week, Germany said it would raise the alert level under its emergency gas plan to secure supply following the recent reduction of pipeline supplies from Russia.
Read more: Germany unable to heat homes next winter: Minister
