Putin’s Latest Order Could Cause a Recession

Putin’s Latest ORDER Could Cause A Recession

(RightWing.org) – European leaders have embraced wide-ranging sanctions against Russia as part of an effort to pressure Putin to withdraw his troops from Ukraine. As part of those efforts, they recently started reducing the amount of liquid natural gas and crude oil they import from Russia. However, Putin’s latest pushback against those efforts could lead to a European recession.

At the end of March, Putin announced that beginning on April 1, all European Union (EU) members must begin paying for any Russian gas purchases using Russian rubles. France and Germany quickly dismissed the demand, followed by other EU nations. According to them, Putin’s ultimatum amounted to blackmail.

#UPDATE Russian energy giant Gazprom says it had stopped all gas supplies to Poland and Bulgaria "until payment is made" in rubles

President Vladimir Putin last month said Russia will only accept payment for deliveries in its national currency pic.twitter.com/1sRUwC9HOm

— AFP News Agency (@AFP) April 27, 2022

Predictably, on Wednesday, April 27, Russian gas exporter Gazprom announced its decision to end all sales of liquid natural gas to the European nations of Bulgaria and Poland. The Russian gas company staggers payment schedules from EU countries, and experts predict the provider will expand its blockage of gas supplies as payments become due from other European countries.

European economists Holger Schmieding and Kallum Pickering recently told CNBC a sudden halt in the flow of Russian gas supplies could push Europe into a recession. Europe receives roughly 40% of its natural gas imports from Russia, leading to a decimation of portions of Europe’s economy.

Europe could be pushed into recession if Russia’s gas squeeze widens, economists have suggested, after Gazprom cut off flows to Poland and Bulgaria.https://t.co/Vl38NpOMtG

— Commercial Awareness (@ComAware_4S) April 28, 2022

Additionally, Europe already faces “concurrent economic shocks” from the ongoing military conflict in Ukraine, including massive surges in the cost of food and other necessary supplies.

Schmieding and Pickering expect the economic fallout from such a scenario would likely last through the spring of 2023.