The Rising Influence of Rising Affluence

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Putin is squeezing gas supplies. And Europe is getting seriously worried about a total shutdown

https://www.cnbc.com/2022/06/24/putin-is-squeezing-gas-supplies-and-europe-is-getting-seriously-worried-about-a-total-shutdown.html

“Russia is diminishing the supply of gas little by little — to some countries [by] almost 100%; to others, cutting 10, 15%,” Josep Borrel, the EU’s top diplomat, told CNBC Friday.

“I don’t think they are going to cut the gas overnight, especially as we are going into the summer and during the summer the gas is not a strategic weapon. But the winter could be difficult and we have to be prepared in Europe.“

When asked if he was concerned that Russia could fully cut gas supplies, Luxembourg Prime Minister Xavier Bettel told CNBC: “I’m fully aware that they can. They can. It’s their choice, natural choice. They can close or open.”

He stressed the importance of all 27 EU member states agreeing on its approach to the issue. “In Moscow one person can decided by himself to cut energy to Europe.”

Reduced gas flows have deepened concerns that the EU could be about to face a tough economic period. Analysts at Berenberg said this week that the latest cuts in gas meant their new base case for Europe was recession.

“Hit harder than the U.S. by the energy price shock, we project the euro zone economy to enter recession before the U.S.,” analysts at Berenberg said in a note Tuesday.