Dear friends, dear guests,
Thank you for your participation in the webinar “Energy Stop from Russia?” last Wednesday. In the end there were over 3,000 people in Zoom and on Youtube. Special thanks to our four panelists who shaped this important and deep discussion with their excellent contributions.
Those who missed the webinar or would like to watch it again can do so now here:
With our guests and your questions, we looked at the issue of an embargo to energy supplies from Russia from several angles. Here is a longer summary which you can also find on Twitter (here – feel free to share!).
Professor Monika Schnitzer and Professor Christian Bayer began by presenting their analyses of the economic impact of an energy embargo on Germany and Europe. It became clear that the impact cannot be accurately predicted and ranges from <1% to > 6% drop in GDP, but can be mitigated by government action. However, both stressed that ultimately this economic consideration is only one aspect and that other aspects play a role in the political decision. It is important to be cautious and prepared, especially if Putin imposes an embargo on his own initiative. Professor Bayer emphasised that economists should not be too vague in pointing out the economic options for action, but should clearly name concrete measures, e.g. to reduce and cushion the economic self-damage of an embargo.
In a deep dive into the Russian economy, Professor Sergei Guriev has stressed that an embargo of gas, coal and especially oil, which accounts for the bulk of energy revenues, would hit the Russian economy and budget hard. In his estimation, in weeks to months Putin would be forced by an embargo to end the war, among other things because there would then be no money for weapons, spare parts and soldiers. He also emphasised the role of China and warned of the economic consequences of a long and possibly spreading war for the West as well.
Dr Volker Weichsel made it clear that we could not assess the exact consequences of an embargo with absolute certainty – especially with regard to the damage to Russia, Europe and the influence on the war of aggression against Ukraine. What we would know for sure, however, is how enormous the foreign policy and economic damage caused by Germany’s and the EU’s hesitation in Ukraine and its threatened neighbouring countries already is. In his view, an embargo is therefore not only necessary from a foreign policy point of view, but would also enable the EU to take the reins instead of always reacting to Putin.
Finally, our guests discussed the possibility of a differentiated embargo, consisting of a quick and complete import ban on coal and oil and an import duty on Russian gas. This would have the advantage that the effect on Russia’s revenues would be high, because a large part of its energy revenues is generated by oil, and at the same time European countries could substitute oil much more easily than gas and, thus, harm themselves less (and thus last longer). An import tariff on gas would have the advantage that it would be scalable, e.g. could be increased by 5% every week of the war, and could also bring in additional funds for aid to Ukraine and reconstruction. All guests agreed that this combination of embargo and import tariff would also be a very good way to increase the pressure on Putin as quickly as possible, given the resistance to a full embargo.
This was also the view of almost 90% of you in the final vote of the evening (see picture below). Interestingly, the opinion on a complete embargo did not change.
Next webinar: “War in Europe – Is the EU fit to fight for peace?” 21.4.2022 – 17:30 CEST
We at Europe Calling continue to stay on the topic. After Easter, we want to ask in the next webinar whether the European Union and its institutions are at all properly outfitted to defend peace. Especially when you look at the discussions in the Council of the EU member states regarding the embargo, you quickly get doubts whether, for example, the required unanimity of the countries does not ultimately block more decisive help for Ukraine. Join us here: https://t1p.de/7zka
One more request: Your feedback
In this webinar, we tried out some new things. To understand if this was a good idea or not, we would very much appreciate your feedback here: https://t1p.de/gm4n9 (takes less than 1 minute).
Many thanks and European greetings,
Maximilian Fries and everyone at Europe Calling