War in Europe, energy crisis and uncontrolled inflation around the world. In many ways, 2022 was the worst year in four decades for many large parts of the world. As central banks slammed on the brakes abruptly, if not belatedly, stock and bond prices began to lose ground.
However, if we leave the bad news behind, we can find the good side as well. Two world leaders, Russian President Vladimir Putin and Chinese President Xi Jinping, look disappointed.
Contrary to general assessments, E.E. eliminates the shortage of natural gas flows from Russia. For two decades, Russia supplied 40-50% of the natural gas consumed by the EU. And, in an effort to make it more vulnerable to extortion, he cut off gas supplies from mid-2021.
The result was gas reserves in the EU. will be 20 percentage points below normal in early 2022, but even as Russia permanently shut off key gas pipelines to Europe for a year, the EU has now increased its stockpiles 10 percentage points above normal. With this change in reserve levels by a total of 30 percentage points during the year, Europe is well prepared for the current heat demand season.
Of course, the blow was the increase in gas imports from sources outside of Russia and the drop in consumption to 20.1% of the usual level from August to November. High energy and food prices have reduced the purchasing power of consumers, but at the same time increased production costs.
Part of Europe has slipped into recession. However, as Europe has reached a good level of its reserves, prices for 12-month natural gas futures fell again from a high of 300 euros per MWh on August 26 to 91 euros. This event confirms our view of a sustainable economic recovery after the end of a likely mild winter recession. Having started a brutal war, Putin has no easy way out.
Ukraine and free countries opposed him. The cost of war, the imposition of sanctions, and the growing cost of repression will be a heavy burden as long as Putin remains in power.
Despite Moscow’s blackmail, the EU has now increased its holdings by 10 percentage points above the norm.
* Messrs. Holger Schmieding, Callum Pickering and Salomon Fiedler are economists at Berenberg Bank.
Source: Kathimerini
Lori Barajas is an accomplished journalist, known for her insightful and thought-provoking writing on economy. She currently works as a writer at 247 news reel. With a passion for understanding the economy, Lori’s writing delves deep into the financial issues that matter most, providing readers with a unique perspective on current events.