The counter-offensive against Putin is once again being played out on an economic level.
On the one hand, US President Joe Biden announces the US embargo on oil, gas and coal from Moscow, also shared by Boris Johnson's UK, while the European Union - which has dissociated itself from the US position - he is thinking of issuing a new European mega bond - although not confirming the news for now - to support energy and defense costs and plans to reduce his dependence on Russia. Finally, the International Energy Agency is preparing to place large quantities of oil stocks on the market.
EU: dependence on Russian gas reduced by 2/3 within this year
The European Commission has published i Piani to reduce the EU's dependence on Russian gas by two-thirds this year e put an end to the need to draw on Russian supplies”well before 2030".
The EU executive body has said it will achieve this by switching to alternative supplies and expanding clean energy more rapidly under the plans, the implementation of which will primarily be the responsibility of individual member state governments.
The Commission has said that gas and liquefied natural gas from countries such as the United States and Qatar could this year replace more than a third - 60 billion cubic meters - of the 155 billion cubic meters that Europe receives each year from Russia. A contribution to this transition by 2030 could also be a increase in the use of biomethane and hydrogen.
New projects employing wind power e solar could replace 20 bcm of gas demand this year, while tripling capacity by 2030, adding 480GW of wind power and 420GW of solar, could save 170 bcm a year.
Lower the thermostats by 1°C it would help save another 10 billion cubic meters this year, while replacing gas-fired boilers with 30 million heat pumps by 2030 would save another 35 billion cubic meters, the Commission added.
Bond will be of monster amount, of the Sure type
In the European Union, not all countries agree on the opportunity to ban energy supplies from Russia and the US has therefore decided to proceed with a unilateral move.
The European Union bond assumed by some market sources - the amount of which will be distributed to all its 27 countries - will most likely have the structure of the "SURE" type (Support to mitigate Unemployment Risks in an Emergency), already adopted by the European Union.
It will be of a "monster" amount say some of the primary delaers and will probably be announced at the Versailles summit.
Gentiloni sees additional investments of over 650 billion
Paolo Gentiloni, EU Commissioner for the Economy said yesterday that work is underway "in view of the Versailles summit to quantify the need for additional investments: 650 billion a year just for the ecological and digital transition, some tens of billions for those in Defense"
The previous Sure program was announced about a year ago for an amount of 1800 trillion euros.
Good reaction from the markets, but bonds will still weigh on debt
Today the spread between the BTP and the Bund narrowed by 10 basis points to 150 following the news, while the Euro strengthened against the dollar and the European stock exchanges immediately resumed their run.
"Certainly the issuance of a new bond brings benefits in the short and medium term," says an analyst. "Instead it brings burden in the long run because it will also weigh on the debt of the countries".
The European Commission already has the instrument of NextGenerationEU €800 billion recovery fund “to support Europe's recovery from the coronavirus pandemic and help build a greener, more digital and more resilient Europe” and to be raised on the capital markets by the end of 2026.
IEA to soon release 'all the oil needed'
On the other hand, today the member countries of theInternational Energy Agency (IEA) have decided to release further quantities of oil stocks in the near future to deal with the surge in energy prices caused by the war in Ukraine. After announcing the anti-price rise plan, the director of the agency, Fatih Birol, Has criticized the decision of Saudi Arabia and the United Arab Emirates not to pump more crude oil on the market to cool down prices.
In an interview with the Financial Times, Birol explained that last week's coordinated release by the United States and other major energy-consuming nations of 60 million barrels was an "initial response" and that the IEA is ready to do “everything” for reduce volatility in the energy markets caused by the Russian invasion of Ukraine. "We are ready to release as much oil as needed," Birol said, noting that 60 million barrels represented just 4 percent of IEA members' total strategic oil reserves.
