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German economy faces €260bn hit from war, energy crisis
GERMANY
Meanwhile, Germany industry is appealing for exemptions to the rationing.
THE German economy faces a €260bn blow by the end of the decade as a result of the war in Ukraine and the energy crisis, according to a study published by the Institute of Employment Research on August 9.
The study predicts that Germany’s price-ad- justed gross domestic product will be 1.7% lower next year in comparison to past expecta- tions of a peaceful Europe. It also projected that there would be around 240,000 fewer people in employment in the country next year, with no increase in employment anticipated until at least 2026. By this stage, financial measures will begin to counter the negative impacts of the problems, and by 2030 there will be 60,000 more people employed.
European gas prices have exceeded $2,000 per 1,000 cubic metres in recent weeks, and the supply crunch is particularly acute in Germany, following Russia’s reduction in flow via the Nord Stream to only 20% of capacity. The government has already begun introducing emergency plans to conserve gas, including energy rationing. According to the study, one of the biggest losers
in Germany will be the hospitality industry, and energy-intensive sectors such as chemicals and metal production are also set to be heavily affected.
If the economic situation worsens - for example if Russia cuts off gas supply to Europe entirely, and energy prices were to double again - Germany’s economic output would be nearly 4% lower in 2023 than it would have been with- out the war. This would result in employment slumping 660,000 after three years, and remain- ing 60,000 below the current level at the end of the decade.
Meanwhile, German industry is appealing for exemptions to gas rationing, fearing production losses and subsequent losses. Reuters reported on August 9 that the German network regu- lator had received scores of requests for these exemptions.
“Blanket exemptions are not provided for in the current law,” the regulator told the news agency, while adding that it maintained “a con- stant dialogue” with industry to prepare for a gas supply emergency. ™
Turkey dispatches drillship to East Med once more
TURKEY
The launch of the vessel comes amid rising tensions between Turkey and Greece.
TURKEY is set to resume gas exploration in contested waters of the east Mediterranean after dispatching the Abdulhamid Han drillship on August 9, with the blessing of Turkish President Recep Tayyip Erdogan.
“The survey and drilling work we are con- ducting in the Mediterranean are within our sovereign territory,” Erdogan said at a ceremony to mark the launch of the ship. “We do not need to receive permission or consent from anyone for this.”
The launch comes amid rising tensions between Turkey and Greece, after Erdogan accused Athens of arming islands in the Aegean Sea that have demilitarised status – a claim that the Greek government denies. A government spokesman commented to reporters on August 9 that it was monitoring the situation with the drillship closely.
“We need to be vigilant .... We’ve always been doing what we have to do to have stability in our
region and to fully defend international law and our own sovereign rights,” government spokes- person Giannis Oikonomou said.
Ankara claims the 238-metre Abdulhamid Han is the biggest and most technologically advanced ships for deep sea drilling in its fleet, capable of sinking wells to depths of more than 12,000 metres. The last time that Turkey dis- patched a drill ship into the East Mediterranean was in 2020, with the move sparking interna- tional condemnation.
The Yavuz ship, which was used then, is now operating in the Black Sea along with the Fatih and Kanuni vessels, where Turkey estimates it has found a 540 bcm gas deposit. Turkey is eager to fast-track the development of this field, Sakarya, given its near-total reliance on gas imports to cover its demand. This reliance has enlarged the economically-struggling country’s account deficit, confounding government efforts to swing to a surplus ™
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w w w . N E W S B A S E . c o m Week 32 12•August•2022