Europe, which has gorged itself on Russian gas for decades, is about to experience a harsh winter. The majority of Russian gas supplies to Western Europe have been halted due to sanctions imposed on Moscow by the European Union and the Russian energy giant Gazprom cutting off supply through the Nord Stream I pipeline (which was allegedly sabotaged this week). Since the Dutch TTF Gas Futures market reached a peak on August 26, natural gas supplies in Europe have decreased significantly from previous month, falling by 40%.
However, this provides little solace for European consumers and businesses. Some people are spending so much money on energy that their budgets are barely keeping them afloat. (The cost of natural gas has increased 400% since this time last year.) Politicians in Europe are aware that they are facing a challenge that might lead to a political and economic crisis throughout the continent.
The European Union and individual European governments have been frantically trying to stop the worst from happening in recent months, including gasoline prices being so prohibitive that businesses begin to shut down, the economy stagnates, and families begin to huddle under blankets. Today, there is more gas stored than 88%. Bilateral energy deals are being signed by nations like France, Germany, and Italy with Qatar, Algeria, Azerbaijan, and any other nation with the ability to export natural gas to Europe. The EU is asking its members to take all reasonable steps to cut their energy use by 15% and to help out their neighbors with supplies if energy shortages do materialize. European political leaders place a high importance on upholding solidarity.
But if kids are freezing in their houses or if their parents can’t afford the utilities, it will be much harder to maintain that togetherness. It doesn’t take a political genius to recognize that economic unrest leads to political resistance to in power regimes in Europe.
In the Czech Republic, tens of thousands of protesters have already assembled in Prague for a march against rising fuel prices. Similar demonstrations may easily take place in Paris, Berlin, or Rome. An energy crisis is the perfect political kryptonite for anti-establishment parties to utilize to put the ruling elite in danger. In fact, the extreme Right has already had a successful year in Europe. In the June parliamentary elections in France, Marine Le Pen’s National Rally increased its representation more than tenfold by winning a record 89 seats. A right-wing alliance was propelled to a narrow majority with the aid of the Sweden Democrats, a marginal group throughout the most of its history. In addition, Giorgia Meloni, the head of the similarly contentious Brothers for Italy party, will succeed Mario Draghi as Italy’s first female prime minister.
A populist tsunami sweeping the continent’s coasts is the last thing Brussels needs or wants. Politicians like German Chancellor Olaf Scholz and French President Emmanuel Macron oppose it as well; some inside the French administration are concerned about the same kind of protests that took place in the Czech Republic this week. They are thus making every effort to lessen the blow. It’s currently fashionable to cap energy costs in order to prevent households and businesses from going bankrupt. In order to finance a gas price ceiling, Scholz stated this week that his coalition government will assume about $200 billion in debt. France has already implemented a restriction for household spending that will cost Paris around $16 billion in the coming year. Liz Truss, the prime minister of Great Britain, wants to cap annual energy costs at more than $2,700 on average. And on Friday, EU energy ministers adopted a proposal to raise almost $136 billion to help families cope with rising energy costs.
Energy weaponization by President Vladimir Putin is a hazardous game for Russia, which is now forced to rely on Asian markets to make up for Gazprom’s decline in European earnings. However, Putin is already enjoying some light respite as he sees the European nations pour money into the issue he created.
