The gas sanctions were aimed at Putin and – apparently in complete ignorance of the economic relationships in the global energy market – they shot themselves in the knee. The result: Gazprom is making record profits and the German economy is in dire straits.
It was “stupid” to start an economic war against the most important energy suppliers, said Sahra Wagenknecht in the German Bundestag, which brought her a lot of trouble. Here is the crucial passage of her speech:
“Of course the war in Ukraine is a crime. But the idea that we are punishing Putin by impoverishing millions of families in Germany and destroying our industry while Gazprom is making record profits – how stupid is that? Inexpensive energy is the most important condition for the existence of our industry.”
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The fact is: since the Russian army invaded Ukraine, there have been an incredible number of losers: around 40,000 dead, according to the United Nations, more than seven million refugees, according to the UNHCR and also the German economy, which is now trembling before the coming winter, can be counted among the losers.
However – and this is where Sahra Wagenknecht has her point – there is also a surprise winner that should not exist in the theory of western economic sanctions: the Russian company Gazprom. This company has never experienced such a boom. In the first six months of 2022 alone, the record profit from the previous year was already surpassed.
Here are the business facts:
This German-Russian energy partnership, which is now dealt with under the heading “Dependence on Russia”, was considered a stroke of luck for decades.
The relationship between Gazprom and German industry only changed with the Russian invasion of Ukraine and the economic sanctions that were launched a little later in response: “Our sanctions are working,” said Scholz.
In truth, however, the gas sanctions in particular were tantamount to self-injury by the German economy. They aimed at Putin and shot themselves in the knee – apparently in complete ignorance of the economic relationships in the global energy market. And in both at the same time.
While America can provide itself with energy, German industry has become distressed. Here are the most important items in the German damage balance sheet:
Gabor Steingart is one of the best-known journalists in the country. He publishes the newsletter The Pioneer Briefing. The podcast of the same name is Germany’s leading daily podcast for politics and business. Since May 2020, Steingart has been working with his editorial staff on the ship “The Pioneer One”. Before founding Media Pioneer, Steingart was, among other things, Chairman of the Management Board of the Handelsblatt Media Group. You can subscribe to his free newsletter here.
Gazprom is on the other side and can hardly walk with strength:
Conclusion: You shouldn’t blame her for the fact that the left Sahra Wagenknecht noticed before Habeck and Scholz what was being played here. She, who is now being threatened with expulsion from the party by her own people, can only hope that word of the correctness of her analysis will get around. A sentence by CDU pioneer Kurt Biedenkopf may comfort her: “Reality is eating its way through.”