German government must justify its refusal to ban Russian oil and gas – opinion

In an op-ed in Frankfurter Allgemeine Zeitung, economics editor Johannes Pennekamp calls on Germany government to justify its refusal to cut off oil and gas imports from Russia with reliable analyses that such a move would indeed cripple Germany’s economy. Pennekamp cites the Deutsche Bundesbank, which has said a European oil and gas embargo against Russia would only plunge Germany into a deep recession – a slump that would most likely be less severe than the impact of the corona crisis. The government has refused an embargo due to “the threat of mass unemployment and poverty” but “has so far failed to substantiate these scenarios with reliable analyses” and instead just trusts the warnings of business and labour union leaders, he argues. Pennekamp said the onus is now on the German government to make the case that banning Russian gas and oil would indeed cause greater harm to the country than what the Bundesbank itself has described. “It puts the federal government under even greater pressure to justify itself.”

Leading German economic institutes have said an immediate embargo on Russian fossil fuel supplies would lead to a 2.2 percent fall in GDP in 2023, amounting to 220 billion euros in 2022 and 2023 - equivalent to more than 6.5 percent of Germany’s annual economic output.