Something for your Espresso: 3 Risks for the Winter
Good Morning from Europe!
After suffering a setback in the Slovakian election, it appears that the election in Poland is aligning with the desires of Brussels, potentially paving the way for a more pro-European government. If this scenario unfolds, it offers a glimmer of hope amid the challenges facing European policymakers as they head into the winter:
Meloni, seemingly strapped for resources and committed to maintaining spending levels that Brussels finds unpalatable, is facing criticism. Meanwhile, Scholz, under the guidance of Finance Minister Lindner, is attempting to balance the demands of the German electorate, which has the AfD thriving in the polls.
Additionally, the energy supply situation remains a potential source of contention in 2023.
What’s not widely known is that Europe still relies on Gas imports from Russia through vulnerable pipelines. If global energy prices remain high and the weather takes a colder turn than usual we shouldn’t rule out that Putin finds some urgent maintenance issues. Or perhaps Norwegian pipes suffer the same faith as Nordstream.
In any event, gas prices in Europe could be a source of chaos and misery this winter:
Chart 1: Russian gas routes