EU agonizes loss of Russian energy
Date
9/18/2024 8:27:47 AM
(MENAFN) Former European Central Bank President Mario Draghi has raised concerns about the significant decline in the European Union's global economic competitiveness, attributing it to the loss of affordable energy supplies from Russia. In a comprehensive report presented on Monday, Draghi outlined critical priorities for European Union policymakers, including reducing energy costs, enhancing competitiveness, and increasing defense investments.
Draghi, who previously served as Italy's prime Minister from 2021 to 2022, pointed out that European Union member states are grappling with the consequences of soaring energy prices and can no longer depend on open foreign markets as they once did. "Europe has abruptly lost its most important supplier of energy, Russia," he stated, highlighting that the geopolitical landscape is becoming increasingly unstable. He noted that what were previously considered dependencies have now emerged as vulnerabilities for the region.
Although Draghi acknowledged that energy prices have decreased since their peak, he emphasized that European Union businesses continue to face electricity costs that are 150percent higher than those in the United States. Moreover, natural gas prices remain nearly 350percent higher in the EU compared to their American counterparts.
The sanctions imposed on Russia following its actions in Ukraine, coupled with the sabotage of the Nord Stream pipeline in 2022, have resulted in a sharp decline in Russian gas supplies to the European Union. As a result, the bloc has shifted its focus to the United States and the Middle East for alternatives, primarily relying on more expensive liquefied natural gas (LNG).
According to data, Russia accounted for over 16percent of the European Union's natural gas imports in the first quarter of this year, a significant decrease from 40percent in 2021. Estimates from Russia's Energy Ministry indicate that American LNG is 30-40percent pricier than Russian pipeline gas, further complicating the European Union's energy challenges.
As the European Union navigates these turbulent waters, Draghi's insights underscore the urgent need for strategic measures to regain competitiveness and stabilize the energy landscape in the region.
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