What If Germany Boycotts Russian Energy?
Although there is growing momentum behind a European initiative to embargo Russian energy in response to that country's war in Ukraine, Germany remains a major holdout. But, contrary to German political and business leaders' claims, the costs of ending Russian energy imports would most likely be manageable.
MUNICH – Since Russian President Vladimir Putin launched his invasion of Ukraine, the German government has been under mounting pressure to join a proposed European embargo on Russian energy. It is widely believed that stopping Russia’s war will require cutting off its financing, which is coming in the form of billions of dollars of payments for oil and gas exports.
The German government opposes an energy embargo, with Minister of the Economy Robert Habeck arguing that it would lead to mass unemployment, poverty, and widespread social unrest. But are these concerns valid?
Germany is certainly heavily dependent on Russian energy. It sources 55% of its gas, 34% of its oil, and 26% of its coal from Russia. But finding substitutes for Russian oil and coal would not be particularly difficult.