London Daily

Focus on the big picture.
Thursday, Jul 10, 2025

Germany’s economy is expected to contract under a Russian gas embargo

Germany’s economy is expected to contract under a Russian gas embargo

An embargo on Russian natural gas could cause Germany’s economic output to drop as much as 5 percent this year, the Bundesbank warned on Friday, potentially driving the country into a recession while pushing up already high consumer prices.
The central bank’s predictions, largely in line with those of several economic institutes, also served as a warning of the danger that Europe’s largest economy could face if Russia decides to cut off gas exports to Europe.

The central bank said its predictions were couched in uncertainty, given the unpredictable nature of the crisis surrounding Russia’s invasion of Ukraine. But its economic modeling showed that cutting off Russian natural gas, which before the war accounted for 55 percent of Germany’s supplies, would cause gross domestic product for the year to shrink 2 percent instead of growing by 3 percent.

“Natural gas prices are likely to rise the most, as Russian deliveries are difficult to replace in the short term,” the bank said. Roughly a third of all natural gas is used for industrial production, including steel and chemicals.

This week, the International Monetary Fund warned that the war in Ukraine would drag down the eurozone economy. It downgraded its forecast of economic growth to 2.8 percent from the 3.9 percent it had predicted in January.

Treasury Secretary Janet L. Yellen also warned that a ban on Russian gas could have a “counterintuitive” effect and harm Europe’s economy more than Russia’s by driving up the global price of fuel.

“Europe clearly needs to reduce its dependence on Russia with respect to energy,” Ms. Yellen told reporters in Washington on Thursday. “But we need to be careful when we think about a complete European ban.”

The European Union has banned Russian coal and is preparing a plan to embargo Russian oil. Although Germany has said it is working to end imports of Russian oil this year, it has been reluctant to move more quickly. Last year, Germany imported about a third of its crude oil from Russia.
Comments

Oh ya 3 year ago
Yes Germany shoot yourself in the head and ban Russian gas. Maybe it will stop you from shipping anymore overpriced crap BMW cars. Russia will just sell your gas to China and India

Newsletter

Related Articles

0:00
0:00
Close
Severe Heatwave Claims 2,300 Lives Across Europe
NVIDIA Achieves Historic Milestone as First Company Valued at $4 Trillion
Declining Beer Consumption Signals Cultural Shift in Germany
Linda Yaccarino Steps Down as CEO of X After Two Years
US Imposes New Tariffs on Brazilian Exports Amid Political Tensions
Azerbaijan and Armenia are on the brink of a historic peace deal.
Emails Leaked: How Passenger Luggage Became a Side Income for Airport Workers
Polish MEP: “Dear Leftists - China is laughing at you, Russia is laughing, India is laughing”
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Weinstein Victim’s Lawyer Says MeToo Movement Still Strong
U.S. Enacts Sweeping Tax and Spending Legislation Amid Trade Policy Shifts
Football Mourns as Diogo Jota and Brother André Silva Laid to Rest in Portugal
Labour Expected to Withdraw Support for Special Needs Funding Model
Leaked Audio Reveals Tory Aide Defending DEI Record
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
London Stock Exchange Faces Historic Low in Initial Public Offerings
A new online platform has emerged in the United Kingdom, specifically targeting Muslim men seeking virgin brides
Trump Celebrates Independence Day with B-2 Flyover and Signs Controversial Legislation
Boris Johnson Urges Conservatives to Ignore Farage
SNP Ordered to Update Single-Sex Space Guidance Within Days
Starmer Set to Reject Calls for Wealth Taxes
Stolen Century-Old Rolls-Royce Recovered After Hotel Theft
Macron Presses Starmer to Recognise Palestinian State
Labour Delayed Palestine Action Ban Over Riot Concerns
Swinney’s Tax Comments ‘Offensive to Scots’, Say Tories
High Street Retailers to Enforce Bans on Serial Shoplifters
Music Banned by Henry VIII to Be Performed After 500 Years
Steve Coogan Says Working Class Is Being ‘Ethnically Cleansed’
Home Office Admits Uncertainty Over Visa Overstayer Numbers
JD Vance Questions Mandelson Over Reform Party’s Rising Popularity
Macron to Receive Windsor Carriage Ride in Royal Gesture
Labour Accused of ‘Hammering’ Scots During First Year in Power
BBC Head of Music Stood Down Amid Bob Vylan Controversy
Corbyn Eyes Hard-Left Challenge to Starmer’s Leadership
London Tube Trains Suspended After Major Fire Erupts Nearby
Richard Kemp: I Felt Safer in Israel Under Attack Than in the UK
Cyclist Says Police Cited Human Rights Act for Riding No-Handed
China’s Central Bank Consults European Peers on Low-Rate Strategies
AI Raises Alarms Over Long-Term Job Security
Saudi Arabia Maintains Ties with Iran Despite Israel Conflict
Musk Battles to Protect Tesla Amid Trump Policy Threats
Air France-KLM Acquires Majority Stake in Scandinavian Airlines
UK Educators Sound Alarm on Declining Child Literacy
Shein Fined €40 Million in France Over Misleading Discounts
Brazil’s Lula Visits Kirchner During Argentina House Arrest
Trump Scores Legislative Win as House Passes Tax Reform Bill
Keir Starmer Faces Criticism After Rocky First Year in Power
DJI Launches Heavy-Duty Coaxial Quadcopter with 80 kg Lift Capacity
U.S. Senate Approves Major Legislation Dubbed the 'Big Beautiful Bill'
Largest Healthcare Fraud Takedown in U.S. History Announced by DOJ
×