A potential war between Russia and Ukraine could have severe consequences for the whole of Europe. Even if the two nations manage to postpone what many see as an inevitable full-scale conflict over the coal-rich Donbass region in eastern Ukraine, tensions between Moscow and the West are expected to result in another European energy crisis.
Natural gas prices have been soaring for months. Russia yet again dramatically reduced gas supplies to Europe via Yamal pipeline passing through Ukrainian territory. At the same time, Russia’s energy giant Gazprom is increasing the volume of gas to China. Moreover, the Kremlin plans to build an additional pipeline to the People’s Republic and supply “the world’s factory” with 50 billion cubic meters of natural gas annually.
The European Union, on the other hand, aims to ban long-term natural gas contracts with Gazprom “to end the reliance on Russia”. Although the European Commission stressed that a prohibition on long-term gas contracts will be concluded with a duration beyond the end of year 2049, it is entirely possible that even this winter, Europe could face serious energy shortages.
The EU gets 60 percent of its gas imports from Russia. If the Ukrainian route remains closed due to a potential war, and Belarus’ President Alexander Lukashenko really cuts gas transit through Belarusian pipelines, some European countries’ energy systems will be on the verge of collapse. The very fact that Gazprom did not order additional capacity for gas transit through Ukraine in January suggests that Russian gas supplies to Europe will be rather limited for the foreseeable future. Given the energy crisis is global, it will not be easy for the EU to purchase enough gas from other producers, which means that some countries could face a lack of electricity.
In October, Klaudia Tanner, the Austrian Defense Minister, warned of a high possibility of blackouts in the EU member. She reportedly stressed that the question was not whether there was going to be a blackout, but rather that “the question is when it will be”. Even in Germany there are fears that power interruptions could soon become the norm, and Swiss companies are also preparing for power outages.
According to US officials, Washington has about “a four-week window” to prevent a Russian invasion on Ukraine. It is entirely possible that the United States and the European Union will impose some sanctions on Moscow, allegedly to deter Russian President Vladimir Putin from invading the Eastern European nation. Some reports suggest that the West plans to impose restrictions on converting Russian rubles into foreign currency, as well as sanctions against the national debt of Russia, Russian energy companies and persons that are in Putin’s “inner circle”. The EU and the US could also ban Russia’s access to SWIFT – the vast messaging network used by banks and other financial institutions to make fast money-transfer instructions worldwide – which could create serious obstacles in purchasing Russian gas and oil. Such a scenario would undoubtedly additionally deepen the European energy crisis.
Indeed, with or without invasion of Ukraine, Russia runs the risk of being completely shut out of SWIFT, although German Gref, chief executive of top Russian lender Sberbank, dismissed reports that new US sanctions could target Moscow’s ability to convert rubles into dollars and other currencies as nonsense. Still, any new sanctions are expected to additionally rise tensions between Moscow and the West and, if the EU states are unable to pay for Russian gas for whatever reason, Gazprom will likely have to cut off supplies. Such a move would lead to a collapse of some of European industries, and long-term power outages could result in a civil unrest.
On the other hand, sanctions could stir up protests and demonstrations in Russia too, especially if the country is cut off from the international banking system and is unable to deliver gas to its major market – Europe. It is, however, is very unlikely that civil unrest in Russia would result in a regime change, or that mass protests in Europe would have an impact on its policy regarding Moscow. Despite its heavy dependency on Russian energy, the EU will join the US’ measures against Russia, and will firmly support Ukraine in case of a Russian invasion. Moscow, for its part, has clearly demonstrated that, at least in this phase of a new Cold War, it does not intend to make any deals with Brussels.
Talking about the EU High Representative for Foreign Affairs Josep Borell’s statement that the bloc would like to take part in dialogue on security guarantees that Moscow recently proposed to Washington, Russian Deputy Foreign Minister Ryabkov stressed that Russia is interested only in bilateral talks with the United States. On December 17 the Kremlin published draft security demands that NATO deny membership to Ukraine and other former Soviet countries and roll back the alliance’s military deployments in Central and Eastern Europe. Moscow is now pressuring the US, as the major power in NATO, to respond to what many see as Russia’s ultimatum.
Given that the American answer to the Russian demands is almost certainly going to be negative, chances of a potential conflict between Russia and Ukraine will continue to grow. As a result, blackouts in Europe could soon become reality.
Image credit: Andrey Metelev