Germany risks recession as Russian gas crisis deepens



* More Europeans activate first stage of gas crisis plans

* Surging gas price adds to policymakers' inflation headache

* Slowing flows hinder efforts to refill storage for winter

* 'We have a problem', says German regulator

By Rachel More and Stine Jacobsen

BERLIN/COPENHAGEN, June 21 (Reuters) - Germany faces certain recession if faltering Russian gas supplies stop completely, an industry body warned on Tuesday, and Italy said it would consider offering financial backing to help companies refill gas storage to avoid a deeper crisis in winter.

European Union states from the Baltic Sea in the north to the Adriatic in the south have outlined measures to cope with a supply crisis after Russia's invasion of Ukraine put energy at the heart of an economic battle between Moscow and the West.

The EU relied on Russia for as much as 40% of its gas needs before the war - rising to 55% for Germany - leaving a huge gap to fill in an already tight global gas market. Some countries have responded by temporarily reversing plans to shut coal power plants.

Gas prices have hit record levels, driving a surge in inflation and adding to challenges for policymakers trying to haul Europe back from an economic precipice.

Germany's BDI industry association on Tuesday cut its economic growth forecast for 2022 to 1.5% from the 3.5% expected before the war began on Feb. 24. It said a halt in Russian gas deliveries would make recession in Europe's largest economy inevitable.

Russian gas is still being pumped via Ukraine but at a reduced rate. The Nord Stream 1 pipeline under the Baltic, a vital supply route to Germany, is working at just 40% capacity. Moscow says Western sanctions are hindering repairs; Europe says this is a pretext to reduce flows.

German Economy Minister Robert Habeck said the reduced supplies amounted to an economic attack and part of Russian President Vladimir Putin's plan to stir up fear.

"This is a new dimension," Habeck said. "This strategy cannot be allowed to succeed."

The slowdown has hampered Europe's efforts to refill storage facilities, now about 55% full, to meet an EU-wide target of 80% by October and 90% by November, a level that would help see the bloc through winter if supplies were disrupted further.

On Tuesday, Italy's government announced initial measures to boost gas storage after energy company Eni ENI.MI reported a shortfall in flows from Russia for more than a week.

Ecological Transition Minister Roberto Cingolani said in a statement the government planned to purchase coal if it needed to use coal-fired power plants to save gas. Cingolani also asked gas grid operator Snam SRG.MI to adopt measures to help bring gas stockpiles to around their targeted level for June.

The benchmark gas price for Europe TRNLTTFMc1 was trading around 126 euros ($133) per megawatt hour (MWh), below this year's peak of 335 euros but up more than 300% from a year ago.

'WE HAVE A PROBLEM'

Countries other than Italy, including Austria, Denmark, Germany and the Netherlands, have activated the first early warning stage of a three-stage plan to cope with a gas supply crisis.

Germany's Bundesnetzagentur gas regulator outlined details of a new auction system to start in coming weeks, aimed at encouraging manufacturers to consume less gas.

The head of the Bundesnetzagentur questioned whether current gas deliveries would get the country through the winter. Earlier, he said it was too soon to declare an all-out emergency, or the third stage of the crisis plan.

"As it stands today, we have a problem," Bundesnetzagentur President Klaus Mueller said on the sidelines of an industry event.

The CEO of Germany's largest power utility RWE RWEG.DE Markus Krebber said Europe had little time to plan.

"How would we re-distribute the gas if we were fully cut off? There is currently no plan ... at European level ... as every country is looking at their emergency plan," he told the same event.

Soaring European prices have attracted more liquefied natural gas (LNG) cargoes, but Europe lacks the infrastructure to meet all its needs from LNG, a market that was stretched even before the Ukraine war.

Disruptions to a major U.S. LNG producer added to the challenge.

Europe is seeking more pipeline supplies from its own producers, such as Norway, and other states, including Azerbaijan, but most producers are already pushing the limits of output.

Even small consumer Sweden has joined European allies in triggering the first stage of its energy crisis plan.

The state energy agency said supplies remained robust but it was signalling "to industry players and gas consumers connected to the western Swedish gas network, that the gas market is strained and a deteriorating gas supply situation may arise".

Sweden, where gas accounted for 3% of energy consumption in 2020, depends on piped gas supplies from Denmark, where storage facilities are now 75% full. Denmark activated the first stage of its emergency plan on Monday. ($1 = 0.9477 euros)



FACTBOX-The three stages of Germany's emergency gas plan

FACTBOX-European measures in case Russian gas supply stops

EXPLAINER-Why Russia drives European and British gas prices

ANALYSIS-Europe fills up on gas but race to replace Russia far
from over

Europe gas storage graphic Link FACTBOX-Germany unveils emergency gas auction plan UPDATE 1-Germany maps out ways to cut gas usage amid Russia supply crunch

German regulator in no hurry to declare highest gas emergency level

Sweden declares 'early warning' for potential gas supply disruptions

UPDATE 1-Denmark declares 'early warning' for potential gas supply disruptions

WRAPUP 9-Moscow threatens Lithuania with 'consequences' over blocked rail to enclave

RWE chief says little time to prepare for Russian gas stop Reduced Russian gas supply an economic attack, says German economy minister

WRAPUP 6-Europe may shift back to coal as Russia turns down gas flows



Reporting by Rachel More and Paul Carrel in Berlin, Stine Jacobsen in Copenhagen, Nina Chestney in London, Giuseppe Fonte and Francesca Landini in Rome, Christoph Steitz and Vera Eckert in Frankfurt; Writing by Edmund Blair and Barbara Lewis; Editing by Carmel Crimmins, Mark Potter and David Gregorio

دستبرداری: XM Group کے ادارے ہماری آن لائن تجارت کی سہولت تک صرف عملدرآمد کی خدمت اور رسائی مہیا کرتے ہیں، کسی شخص کو ویب سائٹ پر یا اس کے ذریعے دستیاب کانٹینٹ کو دیکھنے اور/یا استعمال کرنے کی اجازت دیتا ہے، اس پر تبدیل یا توسیع کا ارادہ نہیں ہے ، اور نہ ہی یہ تبدیل ہوتا ہے یا اس پر وسعت کریں۔ اس طرح کی رسائی اور استعمال ہمیشہ مشروط ہوتا ہے: (i) شرائط و ضوابط؛ (ii) خطرہ انتباہات؛ اور (iii) مکمل دستبرداری۔ لہذا اس طرح کے مواد کو عام معلومات سے زیادہ کے طور پر فراہم کیا جاتا ہے۔ خاص طور پر، براہ کرم آگاہ رہیں کہ ہماری آن لائن تجارت کی سہولت کے مندرجات نہ تو کوئی درخواست ہے، اور نہ ہی فنانشل مارکیٹ میں کوئی لین دین داخل کرنے کی پیش کش ہے۔ کسی بھی فنانشل مارکیٹ میں تجارت میں آپ کے سرمائے کے لئے ایک خاص سطح کا خطرہ ہوتا ہے۔

ہماری آن لائن تجارتی سہولت پر شائع ہونے والے تمام مٹیریل کا مقصد صرف تعلیمی/معلوماتی مقاصد کے لئے ہے، اور اس میں شامل نہیں ہے — اور نہ ہی اسے فنانشل، سرمایہ کاری ٹیکس یا تجارتی مشورے اور سفارشات؛ یا ہماری تجارتی قیمتوں کا ریکارڈ؛ یا کسی بھی فنانشل انسٹرومنٹ میں لین دین کی پیشکش؛ یا اسکے لئے مانگ؛ یا غیر متنازعہ مالی تشہیرات پر مشتمل سمجھا جانا چاہئے۔

کوئی تھرڈ پارٹی کانٹینٹ، نیز XM کے ذریعہ تیار کردہ کانٹینٹ، جیسے: راۓ، خبریں، تحقیق، تجزیہ، قیمتیں اور دیگر معلومات یا اس ویب سائٹ پر مشتمل تھرڈ پارٹی کے سائٹس کے لنکس کو "جیسے ہے" کی بنیاد پر فراہم کیا جاتا ہے، عام مارکیٹ کی تفسیر کے طور پر، اور سرمایہ کاری کے مشورے کو تشکیل نہ دیں۔ اس حد تک کہ کسی بھی کانٹینٹ کو سرمایہ کاری کی تحقیقات کے طور پر سمجھا جاتا ہے، آپ کو نوٹ کرنا اور قبول کرنا ہوگا کہ یہ کانٹینٹ سرمایہ کاری کی تحقیق کی آزادی کو فروغ دینے کے لئے ڈیزائن کردہ قانونی تقاضوں کے مطابق نہیں ہے اور تیار نہیں کیا گیا ہے، اسی طرح، اس پر غور کیا جائے گا بطور متعلقہ قوانین اور ضوابط کے تحت مارکیٹنگ مواصلات۔ براہ کرم یقینی بنائیں کہ آپ غیر آزاد سرمایہ کاری سے متعلق ہماری اطلاع کو پڑھ اور سمجھ چکے ہیں۔ مذکورہ بالا معلومات کے بارے میں تحقیق اور رسک وارننگ ، جس تک رسائی یہاں حاصل کی جا سکتی ہے۔

ہم کوکیز کا استعمال آپکو ہماری ویب سائٹ پر بہتریں تجربہ دینے کیلیے کرتے ہیں۔ مزید پڑھیے یا اپنی کوکی سیٹنگ تبدیل کیجیے۔

خطرے کی انتباہ: آپکا سرمایہ خطرے پر ہے۔ ہو سکتا ہے کہ لیورج پروڈکٹ سب کیلیے موزوں نہ ہوں۔ براہ کرم ہمارے مکمل رسک ڈسکلوژر کو پڑھیے۔