Europe’s gas prices surged, its share prices slid and the euro sank on Monday after Russia stopped pumping gas via a major supply route, sending another economic shock wave through the European Union as it struggles to recover from the pandemic.
EU governments are pushing through packages worth billions of dollars to prevent utilities being crushed by a liquidity crunch and to protect households from soaring energy bills, after Russia’s state-controlled Gazprom said it would stop pumping gas via the Nord Stream 1 pipeline due to a fault.
Europe has accused Russia of weaponising energy supplies in retaliation for Western sanctions imposed on Moscow over its invasion of Ukraine. Russia blamed sanctions by “the collective West” for causing the gas supply problems.
A host of European power distributors have already collapsed and some major generators could be at risk, hit by caps that limit the prices rises they can pass to consumers or caught out by hedging bets, with gas prices now 400% more than a year ago. [Continue reading…]