EU-Russia standoff and German economy

According to the German media, German Chancellor Olaf Scholz has planned to spend at least 65 billion euros ($64.7 billion) on shielding customers and businesses from soaring inflation. Chancellor Olaf Scholz announced the allocation of such massive funds two days after Russia announced it was suspending some gas deliveries to Europe. According to Scholz, Russia is no longer a reliable energy partner and Germany is preparing to get through the winter heating season by satisfying its needs from other sources. According to the German authorities, the 65 billion allocations could be increased if electricity prices rose in the future, while part of the proceeds would be used to offer 1.7 billion euros in tax breaks to 9,000 energy-intensive companies to provide some relief to end users.

Germany, the European Strongman had always maintained its traditional dignity and ego despite its fateful defeat in world war II. However, the German industrial revolution and kitchen heating had always relayed on Russian supplied natural gas throughout history. Russia’s state-controlled energy giant Gazprom had been providing Russian has to Berlin through the famous Nord Stream 1 pipeline, while both governments were also working on Nord Stream 2 gas Pipeline project which was postponed after Russia’s aggression against Ukraine. Recently, the Foreign Ministers summit of G7 nations announced a cap on the prices of Russian oil and gas while Kremlin vowed to delist hostile nations who devalue its oil products.

The Russia-Ukraine war has caused multiple issues for Germany, it prompted a record rise in the prices of oil, gas and other commodities while an average 7.9 per cent inflation has entered into two digits in recent months. Presently, Russia has announced a shutdown of its gas supply to Europe which has caused great worry for the Scholz government, although Chancellor termed Russia an reliable partner, however, the world is well aware of the collective assault of the European bloc against the Russian economy. Scholz himself sabotaged Berlin-Moscow’s economic partnership in support of the western bloc, therefore he must not be distasteful of the outcome of his tactful manoeuvre.