Germans are the EU’s political Achilles’ heel: this has been clear ever since Schröder and Merkel used to fly to Moscow

Gerhard Schroder
Gerhard Schroder, Scanpix

Russia is so far confidently ahead of Ukraine. Fortunately, not on the battlefield. But, as the EU’s foreign policy chief, Mr Borell, has pointed out, since the start of the war, the Community has provided Kyiv with around a billion euros’ worth of weapons, while Moscow has been paying the same amount every day for energy resources, writes in its editorial.

The European Parliament has already voted in favour of the urgent need to stop importing Russia’s gas, oil and coal. However, such action still needs to be approved by the European Council. The German government, which is the largest consumer of Russian gas, will surely oppose urgent implementation, not to mention the pro-Russian government in Hungary.

But it is not the Hungarians but the economically leading Germans who are the political Achilles heel of the EU. This has been clear ever since former Chancellor Schröder became a Gazprom trustee and Merkel, who succeeded him, was constantly on the road to Moscow.

It is no wonder that in Germany, even in times of war, pro-Russian forces march with all sorts of demands.

However, from an economic point of view, it is understandable because Russian gas is one of the main engines of its industry.

However, the war in Ukraine will encourage the acceleration of projects relating to the EU’s energy independence.

Landlocked countries are feverishly rushing to build liquefied natural gas (LNG) terminals, while others are looking for alternative sources of supply.

Billions of euros will be thrown at green energy – wind and solar power plants and the production and use of hydrogen.

Like most countries in the world, Lithuania is currently suffering greatly from the sharp rise in gas and oil prices, but it certainly has something to boast about. The Orlen Lietuva plant, which has invested heavily, has already announced that it will no longer buy crude from Russia. However, it was previously said to be designed to process Russian Urals crude.

And since April, our country has become the first in the EU to refuse Russian gas completely. For a long time, demand for gas has been declining, especially in the heating sector, which has now switched about 70% to biofuels.

However, Lithuania’s main trump card is the Liquefied Natural Gas (LNG) terminal in Klaipėda, which became operational in December 2014 and whose capacity is fully sufficient for the country’s current needs.

Although the terminal has been the subject of much controversy, its benefits are now clear. In fact, it has already paid for itself, according to economist Ž.Mauricas, the lease has been paid for from 2015 to 2021 for around €424 million, roughly €60 million per year.

However, if Gazprom had continued to charge 40% more than the EU average for gas from Lithuania, as was the case until 2014, we would have cost Russia as much as €1.5 billion extra.

On the other hand, the Klaipėda LNG terminal is already pumping gas to Estonian customers, and the Poles will join in May, so there will be an opportunity to make extra money.

In general, the benefits of similar terminals are no longer in doubt, with Germany, Poland and other EU countries building them. Especially as the US has committed to increase the number of LNG shipments to Europe each year. Estonia and Finland have announced that they will look for opportunities to lease a similar terminal together.

Some pro-Russian figures have started to get angry that the rent for this terminal will be as low as €10 million a year. Half-truths are used for perfect incitement: Estonia alone is actually willing to pay that much, but Finland, which uses almost five times more gas than its neighbours, will have to pay correspondingly more, so the final price could be similar to that paid by Lithuania.

But in the short term, this will not save us from a few times higher energy prices.

The government has already drawn up a plan to at least partially compensate residents and businesses, with €832 million from an anti-inflationary package worth more than €2 billion, which still needs to be approved by the Parliament.

It could be argued that such support does not encourage energy savings. To some extent, yes, but prices would become unbearable for some people without it.

For example, at current exchange prices, electricity would be between 16.42 and almost 50 cents per kilowatt-hour in July (at the public supplier’s tariffs) if no subsidy were provided.

If applied, the price would be more than 20 cents. The tariff of independent electricity suppliers is also to be subsidised to keep the final price below 23 cents.

The same applies to gas, especially for the first group of household consumers: without the subsidy, the price per cubic metre is expected to rise from €0.8 to €3.65, and with it to €1.02.

Decisions have already been taken, which should bring benefits in the long term. For example, the absurd landscape requirements for wind turbine developers, which until now have allowed them to set up in only 5% of the country’s territory, are being abolished.

There are also more exemptions for renewable energy investors.

But for now, this is the future. For now, to save money and, in particular, not to pay it to the Russian regime, it may be necessary to heed the simple savings advice circulating in other countries. For example, turning down the heating by one or two degrees if possible, or not driving faster than 100 kilometres per hour on motorways.
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