The German government said on Wednesday that the country has enough gas for now, but urged all consumers – from companies to hospitals and homes – to reduce their use as much as possible with immediate effect.
“There is currently no shortage of supply,” Economy Minister Robert Habeck said in a statement. “Nevertheless, we must take further precautionary measures to be prepared for any escalation by Russia.” He said German gas storage is currently filled to 25% capacity.
“Early warning” is the first of three alert levels set out in Germany’s plan for managing gas supplies in crisis. If the situation worsens, the government will declare an “alarm”, followed by an “emergency”. In that highest case, regulators can ration gas to maintain supplies to “protected customers” such as homes and hospitals. Industrial users will be the first to face the cut.
Habeck said a team of experts from the government, regulators, gas network operators and Germany’s 16 federal states had been called in to monitor the situation closely and take measures “to enhance supply security”.
The European Union is dependent on Russia for about 40% of its natural gas, and Germany is Moscow’s largest energy customer on the continent. EU sanctions imposed on Russia over its invasion of Ukraine include a ban on new investment in energy projects, but do not target oil and gas exports.
Habek said this week that payments in rubles were not acceptable to Berlin and described Russian President Vladimir Putin’s demands as “blackmail”.
Putin has given Russia’s central bank and state gas company Gazprom until Thursday to come up with proposals to accept payments in rubles instead of US dollars or euros as agreed in supply contracts.
With sanctions sanctioned by the Russian central bank banning the swapping of euros and dollars for rubles, Moscow is trying to find a new stream of cash that it can easily spend.
Habek said on Monday that Putin could “directly finance the war, the army, the supply of troops, the supply of gasoline for tanks and the manufacture of weapons in his own country”.
German Chancellor Olaf Scholz held a telephone call with Putin on Wednesday after the German leader insisted that Berlin was committed to paying for Russian energy only in euros or US dollars, according to a German readout of the call.
Putin informed Scholz that he was making a law that payments for Russian energy supplies would have to be made in rubles, but this did not apply to European partners and payments would continue in euros and be transferred to Gazprom Bank, which Not affected by the sanctions, and then converted into rubles, according to the readout.
“Chancellor Scholz did not agree to the process in negotiations, but sought written information to better understand the process,” the readout said.
The threat of recession is rising
Germany’s top economic advisers on Wednesday cut their forecast for GDP growth this year to 1.8% from 4.6% in December, citing inflationary forces and supply chain disruptions caused by the war in Ukraine.
“The high reliance on Russian energy supply carries a considerable risk of recession with low economic output and even high inflation rates,” the Council of German Economic Experts said in a statement. “Germany should do everything possible to immediately take precautions against the suspension of Russian energy supplies and quickly end its reliance on Russian energy sources.”
Austria also issued an “early warning” of a potential natural gas shortage on Wednesday after a government meeting to discuss the crisis.
Austria’s climate minister Leonor Gesler wrote on Twitter: “We are monitoring the state of the gas market even more closely and taking precautions to ensure the supply of our homes.”
The Netherlands – one of Russia’s big energy customers in Europe – said it would ask the public to use less natural gas to reduce its reliance on Moscow.
However, the Dutch government will not launch its gas crisis plan, economy ministry spokesman Tim van Dijk told CNN. Instead, it hoped to reduce Dutch gas use through a campaign appealing to its citizens.
Van Dijk said the campaign had been operating for weeks in light of the war in Ukraine and was not launched in response to Germany’s declaration.
– Charles Riley, Chris Stern, Sugam Pokharel and Benjamin Brown contributed reporting.