Europe’s Sanctions On Russia: An Exercise In Self-Harm

Last Friday, Russian gas giant Gazprom announced the indefinite shutdown of Nordstream 1, a critical artery for European gas importation. This is the latest in a series of energy cuts which have led to soaring energy bills and inflation rates.

Since the invasion of Ukraine in February 2022, the EU has placed far-reaching sanctions on Russia, notably targeting 90% of Russian gas. This approach has dramatically reduced Europe’s gas supply. According to Energy Consultant Aurora, Nordstream 1 had been operating at 20% capacity in recent months, until the present shutdown – which, compared to last year, is an 89% reduction in gas exportation. A three-day cessation of function was announced last Wednesday due to a putative leak, but hours after the G7 agreed to place price caps on Russian gas, the three-day stop became indefinite –  because the repairs are impossible under current sanction rules. This comes off the heels of other gas cuts – Nordstream 2’s cancellation, and the cessation of gas sales to French energy giant Engie, among others. Europe has, until now, relied on cheap Russian gas for one fifth of its energy – with some states such as Germany using as much as 40%. The drastic loss of cheap energy has had seismic effects on European economies. In an effort to make up the difference, European states have been buying LNG from other powers to fill up to 85% of its reserves in preparation for winter consumption – but this is far more expensive, does not fill the gap left by Russian gas, and critically, leaves European citizens behind to foot the bill.

Macron’s infamous proclamation of the “end of abundance” is as ominous as it is apt – consumers and businesses are reckoning with staggering increases in costs, with no relief in sight. With the Euro at 8.9% inflation and the Pound at 10.1% inflation, the future is uncertain. Belgian Prime Minister De Croo predicts “up to 10 difficult winters”, while in Germany, state predictions estimate household yearly expenditure on gas will rise by €500, as towns resort to logging forests for firewood. The UK expects 70% of pubs to close over the winter, and the University of York predicts half of households to be in fuel poverty by the new year. France has become a net energy importer and its energy costs have reached €341/MWh, more than sevenfold its cost in September 2020, as all over Europe coal plants sputter back to life. In fewer words, matters are not in hand.

What is Europe’s response? German Chancellor Olaf Scholz assuages Germany that Europe is prepared for the winter, and passed a €64 billion bill to keep consumers afloat – but it remains a bandaid measure, and Germans are soon to feel it. Rystad Energy Consultants predict the EU’s planned 15% cut in gas usage will lead to “power rationing and blackouts” and a winter that is “the most challenging Europe has seen in decades.” Despite this, EU opposition to Russia is only solidifying; German Vice Chancellor Habeck said to press “the only reliable thing from Russia are lies,” and EU Commission spokesman Mamer impressed that Russia’s announcement “under fallacious pretences is another confirmation of its unreliability as a supplier.”

Whether Russia’s maintenance claim is true or not, the facts remain; while seeking energy independence in the long-term, Europe needs cheap energy immediately. In the name of punishing Russia, Europe’s rulers will watch their economies wither and their people freeze. Further, this crisis at hand begs the question, are these measures even a punishment to Russia? While the Euro hits a 20-year low and its economy shrivels, the Ruble rides a 7-year high thanks to the renunciation of the petrodollar, and the Asian market’s thirst for oil imports. When Foreign Minister Lavrov says: “sanctions always made us stronger,” it reflects a truth – even if this prosperity is short-lived, it is imminently apparent that Europe needs Russia more than Russia needs Europe.

Though Macron was criticized for saying Europe should not humiliate, but rather negotiate with Russia, his peers must see reason, set aside national pride, and come to the table. If Europe chooses to wait for a Ukrainian victory to haggle over sanctions – they’ll quickly find the moral high ground cannot be burned for warmth.