Europe’s last summer before the Russian winter

Even as fighting continues to rage in Ukraine, the war is already making itself felt across the Continent, in the form of rising food prices, fears of gas shortages and worries about the economy.

And with Russian President Vladimir Putin showing readiness to use food, fuel and fertilizers as weapons of war against Western democracies who are arming Ukraine and sanctioning Moscow, things could get rapidly worse.

“It was the severe Russian winters that stopped Napoleon,” said the political scientist Ivan Krastev. “It was the severe Russian winters that in 1941 stopped Hitler. Now [Putin’s] idea is to make the winter harsh within Europe.”

As the war drags on — or even escalates in ferocity — experts predict that European governments will come under pressure from poorer, hungrier, colder voters. 

Add to that a possible sharp influx of refugees from a global food crisis, heat waves desiccating swaths of Europe’s farmland, and the risk of new Covid infections and disrupted supply chains this winter — and it’s little wonder that some are asking how long Western governments will be able to maintain their unity and resolve.

“You’re going to see much more pressure for Europeans to say, ‘Let’s stop the war now,’” said Krastev, who chairs the Centre for Liberal Strategies think tank.

A survey this spring commissioned by the European Parliament found that nearly 60 percent of EU citizens said they were not ready to face hikes in the cost of food or energy. Some 59 percent agreed that “European values such as freedom and democracy must be a priority, even if this impacts prices and the cost of living.” But the report noted that support was highest among the more economically secure — and dropped below 50 percent among those who sometimes or regularly had difficulty paying the bills.

“You could end up with a lot of people disadvantaged in a serious way plus a certain amount of people on the streets protesting against job losses or chucking stones at politicians in gilet jaune [and] Extinction Rebellion-type protests,” said Tim Benton, director of the society and environment program at Chatham House.

The question is, to what extent are European governments ready to withstand a Russian economic assault?

Energy as a weapon

As a huge exporter of food, fertilizers, oil and gas, Russia enjoys significant leverage over the European economy. That will only grow more pronounced, as temperatures drop and freezing households start to compete with manufacturers for natural gas.

Already, 12 EU countries have suffered complete or partial shutoffs from Russian gas. And this week, Russia shut down the Nord Stream 1 pipeline that feeds gas to Germany — as well as France, Italy and Austria — frustrating European efforts to build up stocks for the winter. 

The scheduled maintenance is supposed to last until July 21, but there’s mounting concern in national capitals that Moscow will find an excuse to extend the shutdown, perhaps indefinitely.

Robert Habeck, Germany’s economy minister, warned this month of a “political nightmare” that would threaten social cohesion if gas supplies are so scarce that they need to be rationed by the government. And on Sunday, France’s Economy Minister Bruno Le Maire said he believes that a “total cutoff of Russian gas” is “the most likely option.”

In Germany, politicians have readied emergency gas contingency plans that could dictate which companies should be cut off first. Local authorities are dimming streetlights and reducing temperatures in open-air swimming pools. Berlin is also considering an eye-watering €9 billion bailout of utility giant Uniper, Germany’s biggest gas importer.

Some EU politicians have struck a defiant note. “Putin uses energy as a weapon, and he will try to divide us, unsuccessfully so,” said the bloc’s Internal Market Commissioner Thierry Breton.

The EU has passed new rules, urging countries to load up on gas in time for winter, with reserves currently at 62 percent. But with alternative pipelines already full and liquefied natural gas imports crimped by limited port facilities, there’s little capacity for making up a potential shortfall — meaning governments will be forced to ask consumers to bring down demand or make drastic sectoral cuts.

In the event of a Russian cutoff, politicians would likely start by cutting off nonessential sectors such as the automotive sector, followed by other industries, then social services and finally residential heating, according to Simone Tagliapietra, a senior energy analyst at the Bruegel think tank. “This will be a very difficult political triage,” he says. “I think it would be very challenging for our governments.”

Those who will be in the toughest spot to pay their energy bills will inevitably be the “most vulnerable,” said Kieran Pradeep, co-coordinator at the Right to Energy coalition advocacy group. But many middle-class Europeans could also be pushed into energy poverty for the first time. 

At best, spending a disproportionate amount of income on utilities can cause severe “mental anguish,” Pradeep said. But it can also lead to people self-disconnecting from meters in some countries like the U.K. — and putting themselves in danger of freezing to death.

The risk that Putin will shut off the gas completely to the EU is “pretty likely,” according to Alexander Gabuev, a senior fellow at the Carnegie think tank. “[Putin’s] hope is that there will be more political protests, and then unity around support for Ukraine will disintegrate.”

Putin’s hunger plan

On the food front, prices rose sharply following Russia’s blockade of Ukraine — a major supplier of grain and sunflower oil. Global food prices have been coming down slightly but are still extremely high compared with this time last year. And the worst could be yet to come if the price of fertilizers — linked to the cost of natural gas — stays sky-high in coming seasons.

Global agricultural prices have risen by 30 percent since Russia’s invasion, with inflation of the price of food and non-alcoholic drinks running at 10 percent in May, according to an EU market report. Higher fertilizer costs mean farmers around the world will use them more sparingly, and will therefore generate lower yields, potentially escalating an affordability crisis into a full-blown supply emergency. 

Food prices are not expected to drop from their current high levels until December 2023, said Beata Javorcik, chief economist of the European Bank for Reconstruction and Development.

As a net food exporter, Europe is better insulated than poorer countries in Africa and the Middle East, where governments are more dependent on Russian and Ukrainian imports of staples like wheat, and consumers spend a far higher proportion of their salaries on staying fed.

“Certainly I wouldn’t forecast or argue that we’re going to see starvation [in Europe] but certainly prices could go even higher,” said John Baffes, a senior economist at the World Bank.

Globally, the food system is teetering on a knife-edge: Recent U.N. numbers show that the number of people suffering from hunger increased by 50 million in 2021 compared with 2020, and that number will only grow due to the outbreak of war between two breadbaskets.

politico