Recently there had been frightening scenarios for a possible failure of gas supplies in Germany. There, too, the probability that things would get that bad if the worst came to the worst was only 20 percent, Felbermayr reminded us.
A complete halt to the delivery of Russian natural gas According to the Landesbank Baden-Württemberg (LBBW), the recovery of the German economy from the corona crisis could quickly come to a standstill. “We are only a blink of an eye away from the recession,” said LBBW chief economist Moritz Kraemer of the financial news agency dpa-AFX.
In addition to the imminent end of Russian gas supplies, high inflation is also causing “heavy storm clouds in the economic sky”. “The perfect storm is brewing,” warned the economist. Kraemer referred to the increase in producer prices, which is now stronger than in the post-war period and during the oil price crisis in the 1970s. The Landesbank is assuming that the inflation rate in Germany will be 7.2 percent this year, and an even higher inflation rate of 7.5 percent is expected for the euro zone.
According to Felbermayr, Germany has the disadvantage of having less storage capacity than Austria. In this country, the starting position is much better. In addition, less gas is needed to generate electricity and Austria’s share of industry is smaller.