In one trillion Dollars have reached their value so far energy crisis, most of which was covered by governments with $700 billion in aid to businesses and consumers. However, according to Brueghel Financial InstituteGeria Epirus will remain in a state of emergency for many years, both in terms of energy sufficiency and in terms of the economic situation of its member countries.

After this winter is over, Europe will have to replenish its reservoirs again, but without Russian gas, which means that it will face increased competition for fuel suppliers. Germany has already commissioned its first floating liquefied natural gas (LNG) terminal and expects to receive two more in the new year. However, supply is expected to remain limited until 2026, when additional products from many other suppliers, including the US and Qatar, will be available to the global market. During the summer months, European countries rushed to fill their energy reservoirs despite skyrocketing prices, and thus managed to ensure sufficiency. Meanwhile, however, cold winter temperatures are beginning to test Europe’s energy reserves.

The International Energy Agency warns that the Old Continent is likely to face a natural gas deficit of 27 billion cubic meters over the next year.

Germany’s energy regulator warned last week that saving on natural gas is not enough as consumption has soared lately. Consumers and businesses have been pressured to reduce their energy consumption. Thanks to systematic efforts at many levels, the EU has managed to reduce the need for natural gas by 50 billion cubic meters during the year. However, according to the International Energy Agency, it will face a natural gas deficit of at least 27 billion cubic meters over the next year. in the event that supplies from Russia drop to zero and China again imports large volumes of LNG that it imported in 2021. The China Institute of Energy Economics estimates that the world’s second-largest economy will increase its energy imports by 7% next year after a spectacular drop in demand recorded by the country in 2022, accounting for 5% of global supply. Meanwhile, not only China is a problem for Europe, as many other Asian economies are planning to buy more natural gas. For example, Japan, which was the first importer of LNG during the year, now plans to increase its own strategic reserves, and the Japanese government intends to subsidize imports.

The situation will be no less difficult from an economic point of view. As Brueghel points out, central banks will continue to raise interest rates as the European economy is already in recession and the ability of governments to bail out millions of households and businesses is beginning to dry up. Martin Devenis, managing director of consulting firm S-RM, notes that “if you add it all up, government aid, subsidies and everything else, it’s a crazy amount.” That’s why he expects “governments will have a much harder time dealing with this crisis next year.” Governments’ budget margins are already very tight. About half of the EU member states have a public debt of more than 60% of their GDP. Natural gas futures prices hovered at an average of €135/MWh throughout the year after jumping to €345 in July. According to economists at Bloomberg Economics, if gas prices return to around 210 euros per megawatt-hour, the cost of imports could reach 5% of European GDP. This could turn what is currently a mild recession into a deep recession, forcing governments to abandon any bailout program.