Michael Hüther, Director of the Institute of German Economics, warns of a collapse of the European gas market and of supply chains in Europe if individual EU countries interrupt the gas flow to their neighboring countries due to a supply freeze for Russian gas. The EU must act. “In Europe, gas flows back and forth between countries. The EU must ensure that the gas continues to flow between the countries even if Russia stops supplying gas,” said the economist WELT AM SONNTAG. “It must not come to a situation in which individual countries stop their deliveries to neighboring countries. This is in the interest of Europe and in the interest of Germany, which exchanges gas with all neighboring countries.”
Hüther warned of a repeat of the situation following the outbreak of the Covid pandemic, when some EU countries had closed their borders, trucks were queuing at the borders and European supply chains threatened to collapse. “Immediately after the outbreak of the Covid pandemic, some EU countries closed their borders, placing a heavy burden on the movement of goods and supplies to the EU. Something like this must not happen again if there is a gas supply stop,” said the director of the business-related IW. “If EU countries think only of themselves and cut off gas flows to neighboring countries, a collapse of the European gas market threatens with devastating consequences for companies and consumers. “Production stops in the industry are then almost certain.”
On July 20, the European Commission published its so-called “Winter Plan”, which is intended to prepare the EU for a supply freeze for Russian gas. The EU regulation for securing the gas supply, the so-called SOS regulation, already stipulates that the EU states conclude solidarity agreements with one another in which they promise each other help in the event of a supply crisis.
However, according to the European Commission, the 27 member states have only concluded six such bilateral agreements so far. Germany has concluded corresponding agreements with Denmark and Austria. Others are to follow, including the Czech Republic and Italy. However, it is unclear whether these agreements will be sufficient in the event of a Russian delivery stop. The Solidarity Contracts are designed to help bridge short-term emergencies that are limited to a single member country or region. A long-term failure of the EU’s most important gas supplier, which would affect many countries, is not comparable.