Though Germany is moving “as fast as possible” to end its dependence on Russian energy supplies, such a move cannot be implemented soon, according to Christian Lindner, the country's finance minister.
Any assumption by Russian President Vladimir Putin that Germany will continue being reliant on Russian energy is “wrong” as Berlin does not want “any further business” with the Russian leader, Lindner said. However, he warned that a sudden halt to energy imports from Russia could result in the shutdown of German manufacturers and cause negative macroeconomic effects.
“I don't fear [the] economic costs [of buying less Russian energy]. I fear the physical scenario, if you have to stop the supply, for a complete production line, this causes more than economic costs,” he said. “I think it's preferable to have sanctions, which we can stand for months, for years.”
Lindner criticized previous governments for relying on Russian gas and oil, insisting that it was a “strategic miscalculation.” He blamed Russia’s invasion of Ukraine for the increasing geopolitical and economic risks such as inflation and the debt crises in poor nations, as well as growing food shortages.
Germany imports about 40 percent of its gas and 25 percent of its oil from Russia. Moscow makes about $1 billion daily by selling oil and gas, thereby blunting the impact of Western sanctions aimed at pressuring the Kremlin to end its war.
Germany called off the opening of the Nord Stream 2 gas pipeline project with Russia following the invasion.
The country’s exports to Russia fell by 57.5 percent in March 2022 due to sanctions. As a result, Russia became the 12th biggest export market for Berlin outside the European Union, down from the fifth spot in February.
“The question is, at what point do we do more harm to Putin than to ourselves?” Lindner said. “If I could only follow my heart, there would be an immediate embargo on everything. However, it is doubtful that this would stop the war machine in the short term.”
Any significant block of Russian energy supplies could seriously worsen Germany’s inflation, which reached its highest level in over four decades in March 2022.
The EU is attempting to cut off Russian gas imports by 66 percent in 2022, aiming to become completely free of Russian energy by 2027. However, German unions and employers have opposed EU plans to ban Russian natural gas imports.