The International Monetary Fund gave a dire warning that should it get effected, several weaker EU states' economies will plummet.
One of the reasons for the terrible recession for economically unsound EU members is the sanctions, which have boomeranged due to US pressure to comply.
At one point, Washington boasted that it would provide natural gas, oil, and coal, but the OPEC oil producers slammed the door on Biden during his trip to the Middle East.
Russian Gas Sanctions Boomerangs to Brussels
The International Monetary Fund warned in a blog post on Tuesday that a comprehensive stoppage of Russian gas supply to the EU could slash GDP in the most fragile member countries by up to 6% and send them into a crisis, reported RT.
An announcement comes amid rising fears that gas deliveries to Europe via the Nord Stream 1 pipeline may be suspended when routine annual maintenance concludes on Thursday.
Wall Street Journal reported earlier this week, quoting European Budget Commissioner Johannes Hahn, that the European Commission didn't foresee the pipeline being reopened., noted Bloomberg.
A commission spokesperson advised last Tuesday of a plan for all scenarios if natural gas comes to Europe via the Nord Stream 1 pipeline.
Stated on Tuesday that it was planning for all possibilities involving Russian gas flows to Europe via the Nord Stream 1 pipeline. According to Reuters, gas flows will resume as planned but at a lower capacity than before.
Bloc To Deal With Winter Without Gas Supplies
The International Monetary Fund stated that Europe lacks a clear plan to deal with a Russian gas cutoff, which might lead to higher energy prices and a weaker GDP for weaker EU states.
The Washington-based agency said the three EU member states particularly prone to suffering are Hungary, Slovakia, and the Czech Republic.
This fund is called the threat of an unprecedented shutdown because it generates worries about supply disruptions, even increased prices, and economic consequences. While officials are moving quickly, they lack a plan for managing and mitigating the effects.
Fund recommendations instruct that Central and Eastern Europe secure alternative supply and energy sources, promote energy savings, and strengthen cooperation arrangements to distribute gas across nations to prevent shortages of up to 40% of gas use with a 6% drop in GDP.
Based on the IMF, Europe's energy infrastructure and worldwide supply have so far handled a 60% drop in Russian gas exports from June last year and could possibly take a 70% drop by accessing alternate supplies and energy sources.
However, the agency warns that zero supplies would make diversification much more problematic because bottlenecks could limit the ability to reroute gas within Europe due to low importation capacity or implementation.
A comprehensive closure would result in a nearly 3% decline in EU economic output over the next year.
While some nations, such as Sweden, Denmark, and Greece, would probably see little to no impact on growth, it is noted that Italy, with its heavy reliance on gas for electricity production, may face a decline of over 5%.
At a press conference in Tehran, Putin asked why the EU wants to commit economic suicide when Russia can provide the energy security it needs.
The International Monetary Fund sounded off on a Russian gas cutoff in which weaker EU states will suffer a recession due to self-infliction harm of sanctions.
