Germany news: Country on brink of recession as ‘hundreds of thousands of jobs’ to be lost | World | News

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John Lough, an associate fellow of the Russia & Eurasia Programme at Chatham House, said that Germany’s “naive” reliance on Russian energy has left the country in a vulnerable position. Germany depends on Russia for about 1/3rd of its total energy consumption But there is increasing pressure on the EU to impose an embargo on Russian gas and oil in response to its invasion of Ukraine.

Mr Lough, author of ‘Germany’s Russia Problem’, told Express.co.uk that this would lead to “enormous consequences for their economy”.

He said that Germany had hoped trade with Russia would “calm relations” between the Kremlin and the West, but the expert claimed that the policy has in fact done “the exact opposite”.

Germany’s economy is in a precarious position as inflation across the EU has skyrocketed in recent months, partly as a result of Putin’s invasion of Ukraine.

German annual inflation rose to its highest level in more than 40 years last month.

And earlier this year the German Council of Economic Experts slashed its growth forecast for the country from 4.6 percent to just 1.8 percent.

Meanwhile, on Wednesday, Stefan Kooths, vice president at the Kiel Institute for the World Economy, warned: “If gas supplies were to be cut off, the German economy would undergo a sharp recession.”

Four German economic institutes – the RWI in Essen, the DIW in Berlin, the Ifo in Munich, the IfW in Kiel and Halle’s IWH – said the economy would contract by 2.2 percent in 2023 if Russian energy were to be cut off.

Speaking to Express.co.uk, Mr Lough echoed this sentiment, saying: “The Germans can’t just impose an embargo on gas without enormous consequences for their economy because they have made themselves dependent.

READ MORE: German financial CRASH: Deutsche Bank shares plummet

“Of course, this has turned out to be a very naive policy, because the Germans underestimated the processes which were underway in Russia, despite the fact that they were very well-informed about them.”

He added: “They did believe that diplomacy, keeping the channels open, dialogue etc, would deter the Russians eventually.

“But it seemed to do the exact opposite.”

The European Commission has so far pledged to cut its use of Russian gas by two-thirds by the end of 2022, with the longer-term goal of ending its reliance on Russian energy entirely by 2030.

Speaking to the BBC earlier today, Ukrainian President Volodymyr Zelensky criticised Germany and Hungary for preventing an oil embargo, calling it “an issue of survival”.

He said: “We don’t understand how you can make money out of blood.

“Unfortunately this is what some countries have been doing, European countries.

“Some of our friends and partners understand that it is a different time now, that it is no longer an issue of business and money. That it is an issue of survival.”





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