The Ukraine conflict will have cost Germany an estimated €160 billion (US$171 billion) by the end of this year, or 4 percent of its total domestic output, according to Peter Adrian, head of the German Chambers of Industry and Commerce (DIHK). As a result, the GDP per capita in Germany‘s largest economy would be 2,000 euros lower than it should otherwise have been. These figures emphasize just how much damage has occurred due to these tragic events.
Germany’s Energy Costs Increased by 40% Due to Ukraine War
Germany’s high reliance on the industry has caused the sector to be especially burdened by skyrocketing energy prices, reaching all-time highs across Europe. According to a study conducted last month by Allianz Trade, German companies are projected to pay 40% more for energy in 2023 than before Russia invaded Ukraine on February 24th of last year. Consequently, this has made Germany susceptible and vulnerable due to its acute dependence on industry and costly energy bills.
Adrian noted that the outlook for 2023 and 2024 is comparatively lower than other countries, which was also true in 2022. Germany’s dependence on Russian pipeline gas has resulted in higher energy prices compared to the US, where natural gas reserves are plentiful; meanwhile, France benefits from its abundance of nuclear power sources.
He exclaimed that the current natural gas prices were almost three to five times more expensive than in America, and shockingly electricity was four times higher than what French customers pay.
On the Other Hand, Putin Thinks Gazprom Will Grow Despite Western Embargo
On Friday, President Vladimir Putin commended Russia’s iconic natural gas company Gazprom. He asserted that despite the West’s attempts to reduce its influence, demand for natural gas would continue to surge in Asia; thus allowing Gazprom to thrive. Furthermore, Putin proudly noted that 30 years ago, when the Soviet Union collapsed and was transforming into modern-day Russia, this stock company had been established from assets of the former gas ministry.
Despite being hindered by unfair competition, President Putin stated that Gazprom is still forging ahead with new projects. During a video link to CEO Alexei Miller, he highlighted the fact that global natural gas consumption has increased substantially in the last 30 years and estimated it would grow an additional 20 percent – or perhaps even more – over the following twenty years.
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