Rising gas prices cut 30% out of Germany’s GDP

Berlin, Germany, December 11th, 2017:Gas prices in Europe jumped and proved more than the price of oil, as the German government just announced a 60 day suspension of the approval of the pipeline project, known as Nord Stream 2, Russia’s plan to build a new pipeline from Russia through the Baltic Sea to Germany, a necessary part of reducing Europe’s dependence on Middle Eastern gas.

The decision of the German government was announced after years of prodding and frequent discussion between German politicians and, eventually, to the understanding of the European Union that the current status quo of Russian gas for Europe was too pricey. However, those hopes have been dashed, after the Turkish and German governments, and their main financial benefactor, the Russian government, blocked Europe’s plans for tighter security of gas supplies, built with the sole purpose of reducing Europe’s energy dependence on the Middle East.

The $50 billion Russian project was approved by the German government in 2014, but this announcement came just days after the attempted bombing of a Moscow train station by a suspected bomber who was reportedly on a mission from Syria and also a suspect in recent deadly bombing in Egypt.

Since late last year, NATO and the EU has been trying to push Russia to not only stop intervening in Ukraine, but to also end their activities, financially and via the pipeline, to destabilize Europe by destabilizing European governments. All of those measures have failed, and Germany is now officially on side with Russia.

The decision was also one that will undoubtedly follow in the wake of President Trump’s tweet on December 7th, 2017, in which he urged Germany and Europe to stop buying Russian gas.

The suspension for 60 days will allow for talks to continue, and allow time for any necessary reforms to be made in Berlin. The end date for the suspension was set for January 19th, 2018. The Financial Times reported that the Germans, last year, paid Russia $4.1 billion in gas payments.

Fritz Lüthica, Vice President of Gas Europe, however, was quoted as saying that the pipeline project is being viewed as an important bridge between Russia and Europe.

Russia’s attempt to directly transfer their energy to the west directly through an undersea pipeline will greatly reduce the amount of gas Europe uses every day. In fact, according to Swedish energy giant, Gas Alta, over $100 billion have been spent on finding and building seven gas pipelines in Europe to cut Russian supply, beginning with Nord Stream in 2011.

Now, almost five years later, Russia is going back to a more direct strategy, directly moving gas over Russian territory, over long distances.

EURNetwerk, one of Europe’s largest daily newspaper sources, had this to say about the situation.

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