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Russia’s invasion of Ukraine earned the communist country countless sanctions from different several states. In retaliation, President Vladimir Putin cuts the gas supply in answer to the Russian sanctions imposed by “unfriendly countries.”
Europe is suffering more damage due to Russia sanctions imposed by the US and other countries due to Russia’s invasion of Ukraine. If this continues, Europe could possibly experience the largest financial crash in history.
Europe Defies Putin’s War Plan, Imposes Russia Sanctions
Because of Russia’s committed “war crimes,” it now faces left and right sanctions from the European Union. Brussels cripples its battling economy and completely disrupts its war actions. However, Putin stayed resolute so far. Most believe that he will pursue his own political war against the EU as revenge.
The EU claimed that the move is “politically motivated.” Russian gas supplies that run into Europe through the Nord Stream 1 pipeline rapidly dropped to just one-fifth of their volume.
Moreover, Eurozone’s inflation soared to 8.9% in July from 8.6% one month earlier. The euro plummeted, getting almost equal to the US dollar earlier this month for the first time in over two decades.
“Some European countries, such as Germany and Italy, are very dependent on Russian gas. You cannot replace it like that. Other European countries, including France, will suffer as well because Russia was an important oil supplier. Economic sanctions are doing more damage to Europe than to Russia. The recession is obvious,” said Charles-Henri Gallois, President of the Generation Frexit campaign in France.
Expanding Eurozone Economy May Face Inflation, Energy Plug
The eurozone economy stretched by over thrice the amount that economists anticipated. The economic region puts on a stronger grip as rising inflation and likely Russian energy plug threaten to project it into recession. However, despite the advantage, Germany, Europe’s leading economy lays dormant.
Eurozone inflation rocketed to another all-time high. It backed European Central Bank’s requests to implement its first interest-rate hike since 2011 with another huge stratagem.
The enthusiasm in German businesses declined to the worst level since the early pandemic. There are growing concerns that massive inflation and Russia’s minimal energy supplies from Russia will incline Europe’s largest economy into a plunge.
Russia Gazprom Cuts Latvia’s Gas Supply
Gazprom puts a plug on Latvia’s gas supply, accusing the state of violating the purchase conditions. However, the state-owned energy corporation didn’t provide any details regarding the purported violation. Latvia depends on Russia for natural gas, but its government claimed it doesn’t expect Gazprom’s action to have a major effect.
EU members condemn Russia for fortifying gas exports in retribution for far-reaching Western sanctions specified over its Ukraine invasion. Gas accounts for 27% of Latvia’s energy consumption. On Wednesday, Gazprom cuts Europe’s gas supply by 20%.
The EU declined Russia’s demand to pay Gazprom in rubles, saying that there’s no contractual agreement for ruble payments. The Latvian gas utility Latvijas Gaze claimed that it’s buying gas from Russia but will pay in euros. Currently, Gazprom ceased its gas supply to Denmark, Finland, the Netherlands, Bulgaria, and Poland for not paying in rubles. It also stopped its gas delivery to Germany’s Shell Energy Europe.
