Paul Krugman said Putin’s plan to weaponize natural gas prices didn’t work.
In a column in the New York Times, the chief economist noted Europe’s success in sailing last winter.
Russia reduced its gas supplies in response to Western sanctions.
Putin’s plan to weaponize the natural gas market has so far been a failure, and Russia is just an imitation of a global superpower, according to Nobel laureate Paul Krugman.
In an editorial for The New York Times On Thursday, Krugman cited Russia’s efforts to reduce its supply of natural gas from global markets, a move that still stands Wreaked havoc on the energy markets last year. In particular, Europe was said to be at high risk of slipping into an energy crisis this winter, with electricity prices hitting all-time highs after Russian gas flows essentially stopped. Nord Stream 1 pipeline.
But Russia’s attempt to push back against the sanctions has largely failed, Krugman said, as Europe had a pretty good last winter. Established the countries of the European Union Great reserves of natural gas that are largely unused amid warmer temperatures, the eurozone averting fiscal disaster, and managing high inflation without soaring unemployment.
EU gas storages were at 84% capacity At the end of last year, according to Reuters. Meanwhile, the 27-nation bloc is expecting at the moment Inflation in the eurozone is down to 6.9%. in March, down from 8.5% in February.
“Europe has weathered the loss of Russian supplies remarkably well,” Krugman said, adding that modern economies are much more resilient than first thought when Russia first launched its energy war with the West. “Democracies are showing, as they have many times in the past, that they are much tougher, much harder to intimidate than they appear.”
The Kremlin said the supply cuts were a response to Western sanctions Cut Russia off from the global banking system And majorly Restriction of crude oil trade. Europe has withstood the Russian retaliation, while some estimates show that the Russian economy is suffering under the current trade restrictions.
Russia’s energy revenue collapsed by 50%. From last year, according to estimates by the Russian Finance Ministry in early 2023, the country is facing a larger budget deficit as spending increases during its military invasion.
“More than ever, Russia looks like a great power in Potemkin, with little left behind its impressive facade,” Krugman said. Its role as an energy supplier is proving much more difficult to weaponize than many imagine.
Other economists said the Russian economy would struggle in the long run. nation can become Failed state in 10 yearsAs one think tank estimates, it faces a major headwind in the midst of it Isolation from world markets And Decreased investment in technology.
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