Make Alternatives to Russian Gas Available

ifo President Clemens Fuest has called for the establishment of alternatives to Russian gas. “We need parallel structures in place to quickly and affordably suspend gas imports from Russia should future crises make this a necessity,” he writes in an article for ifo Schnelldienst. He adds that for economic and strategic reasons, this would be preferable to abandoning Russian gas altogether, regardless of whether or not imports are suspended during the war.

“If halting gas imports from Russia does indeed make sense, then do so immediately,” Fuest writes. “From today’s perspective, it’s doubtful that we really want to end these imports in 2024, as the German government is now planning. Considering energy supply costs, the smarter strategy once the war in Ukraine is over would seem to be to continue importing gas from Russia, but also have parallel structures in place to quickly do without Russian gas when necessary. These contingencies include LNG port terminals as well as new sources of supply. This should be coordinated at the EU level and will ultimately lead to gas supplies that are more expensive than before, but that is also much more dependable.”

The mutual dependency that currently exists between the EU and Russia would thus transform into Russia’s dependency on the EU – a strategically better situation for the EU. Although permanently halting gas imports would end the EU’s dependency on Russian gas, Fuest writes, it would also remove a mechanism for exerting pressure on Russia. Whether Russia would be prepared to enter into such a one-sided dependency remains to be seen.