Germany: Russian gas cut plunges it into its first trade deficit since 1991

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Germany: Russian gas cut plunges it into its first trade deficit since 1991

The rise in the price of energy generated Germany’s trade deficit and Russia’s economic boycott meant the reopening of coal-fired power plants and the potential renewal of nuclear power plants.

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Germany, the third largest manufacturing power in the world and holder of the the largest current account surplus in the global system in relation to production and populationrecorded in May the first trade deficit in its history since reunification in 1990.

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This was achieved with a negative balance of over 1,000 million euros (1,200 million US dollars), due to the record price of energy (oil and gas) and the profound disruption of international trade caused by the war in Ukraine and sanctions. trade imposed on Russia by the United States, the European Union and the United Kingdom.

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The price of energy in Europe quadrupled last yearand it has risen to € 325 (US $ 355) per megawatt / hour, which implies a 13% increase compared to last December, an all-time record.

The price of energy essentially depends on the value of the gas, and this it comes mainly from Russia, which supplies over 40% of European demand, and over 60% of German demand.

Now Russia has begun to cut gas supply to the European market, and its price, consequently, tends to multiply; and this happens when winter approaches.

This phenomenal increase in the cost of energy was the consequence of an extraordinary increase in the value of imports, to which was added a significant decrease. manufacturing exports, which have fallen by more than 20% in the last yearplunged the German economy into its first trade deficit in three decades.

This places the Federal Republic to face an energy emergency, which leads it to ration the supply of gas both in homes and in industrial users in the second half of 2022, with a certain risk that the crisis will take on an acute character in the last three. months a year, which would entail the closure of large sectors of German industry, especially electro-intensive, such as the large-scale production of aluminum, zinc and plastic, in addition to the production of aircraft, as the Federation of trade unions warned, with a traditional social democratic orientation.

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This energy crisis is what led to the The euro zone will experience an annual inflation rate of 8.6% in May, the highest in the last 40 years; and it has also forced it to reduce demand more and more, which implies the start of a deep recession.

German demand has fallen by more than 5% in the past four months, meaning the industry has started to cut back on its operations, which are expected to intensify in the second half of the year.

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The key figures for German foreign trade are as follows: imports increased by 2.7% in May to reach € 126.7 billion, while exports fell to € 125.8 billion.

The energy emergency caused by the decrease in Russian gas supply forced Foreign Minister Olaf Scholz to do so reopen coal-fired power plantswhich have been closed in the past 6 years.

This obviously contradicts the core of the Federal Republic’s environmental policy aimed at eliminating coal – the most polluting fuel – as a source of energy by 2030. The one responsible for informing this ominous development was the Minister of Economy Robert Habeck, who is the main leader of the Green Party in the ruling coalition.

The green leader announced the immediate reopening of 10 coal-fired power plants, which would lead this highly polluting source to respond to 30% of the Federal Republic’s total demand in 2 years. In turn, this would inexorably lead to a more than 30% increase in carbon dioxide (CO2) emissions.

In case the situation gets worse, as everything indicates it will happen, the decision of the government of Olaf Scholz is to reopen one or more nuclear power generation plantsthat Angela Merkel closed 10 years ago.

German public opinion in this situation is likely to demand an end to the war in Ukraine by negotiating an agreement with Russia that recognizes its vital security interests regarding Ukraine’s non-inclusion in NATO.

Last week, Henry Kissinger presented his latest book:Leadership: You study in WorldStrategy-, and stressed in his presentation that the consolidation of Russian power in Ukraine with the complete occupation of Donbas would inevitably cause a strategic emergency situation for the United States and NATO, which must be resolved by August / September.

From then on, once Russian power was consolidated, this it would imply an unsustainable challenge for the US and NATOwhich would challenge the foundations of the Western Alliance as the leading security organization in Europe and the world with an axis in Washington.

At that time, August / September, the US and NATO are expected to make important decisions of global reach, which means war with Russia and China, or, conversely, recognize a strategic defeat in this. global war of a new kind where power is at stake in the geopolitics of the world.

Source: Clarin

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