Putin has said that Austria can pay for Russian gas in euros

Russian President Vladimir Putin told Austrian Chancellor Karl Nehammer during their meeting earlier this week that gas supplies from Russia to Austria are secure and the country can continue to pay for them in euros.

This was stated by Nehamer to the national news agency APA.┬áNehammer met with Putin near Moscow on Monday and has so far made no public comment on their talks on the security of gas supply to Austria. The country receives 80% of its natural gas from Russia and opposes the European Union’s immediate gas embargo against Moscow, saying it is not possible at the moment.

Putin said gas supplies had been secured, that Russia would deliver the agreed quantities, and that payments could continue to be made in euros, Nehamer said in an interview with the agency.

A ban on Russian gas imports would be detrimental to this sector in Germany

A possible ban on imports of Russian natural gas would be detrimental to paper production in Germany, industry officials said.

“A gas embargo would in practice mean a halt to production for the paper industry,” said Alexander von Reibnitz, chief executive of the Die Papierindustrie industrial association. The war is already affecting paper producers due to the higher cost of raw materials.

“The economic consequences of the war in Ukraine are now drastically exacerbating strong price pressures on our industry,” said Steffen Wurt, chairman of the German Corrugated Industry Association (VDW).

Natural gas is the most important energy source for the paper industry in Germany. 55 percent of the sector’s energy comes from gas, and only 15 percent can be replaced by other energy sources by next winter, Reibnitz said. Therefore, an embargo on Russian natural gas imports would mean a halt to production, which affects many sectors: from food and medicine packaging, as well as medical and household materials, to special quality paper used in the manufacture of filters. Printed paper for newspapers, magazines, catalogs, or brochures will also be affected, Reibnitz added.

If gas supplies are cut off, the German economy will experience a sharp recession

The war in Ukraine has already reduced Germany’s growth prospects, but a total ban on gas imports from Russia, on which it depends heavily, could send the country into recession, according to a report by the country’s leading economic research institutions.

The report, released on Wednesday, estimates that Germany will grow by 2.7 percent this year (compared to a forecast of 4.8 percent), but will only grow by 1.9 percent if gas imports are banned.

In 2023, GDP will grow by 3.1%, but will shrink by 2.2% in the event of a supply shock, experts say.

The Joint Economic Forecast is published twice a year on behalf of the German Ministry of the Economy.

“If gas supplies are cut off, the German economy will experience a sharp recession,” said Stefan Kuts, director of business cycles and growth at the Institute for World Economy in Kiel.

Berlin has opposed a ban on Russian gas, despite calls from Ukraine, the Baltic states, and Poland, which hope to end Russian President Vladimir Putin’s war against Ukraine. German Chancellor Olaf Scholz said this would lead to mass poverty in Europe. Wednesday’s forecast will support him.

The report also says that a sudden shutdown in gas supplies will threaten 220 billion euros in German economic output; additional fuel inflation of up to 7.3 percent this year, compared to a baseline scenario of 6.1 percent; and a reduction in the contraction in unemployment expected from 5% this year to 5.2%.

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