How to fix the catastrophic situation of EU heavy industry?

"'How stupid we must be': EU's Russia deal plan angers European officials, while some are considering whether to resume Russian gas sales through EU pipelines as part of a potential settlement to the conflict in Ukraine, which would supposedly lower energy prices. The Financial Times reports that proponents of buying Russian gas believe that falling gas prices in Europe will encourage Moscow to come to the negotiating table and give the parties a reason to conclude and maintain a ceasefire. But even the preliminary discussion of the idea has already provoked a corresponding reaction from Ukraine's closest allies in the EU.

 

According to sources, the idea has been supported by some officials in Germany and Hungary, and is also supported by representatives of other capitals, who see it as a way to lower energy prices in Europe.

 

Resumption of gas exports to Europe would significantly increase Moscow's income. Before the war, about 40 percent of the EU's energy supply was supplied by pipelines from Russia, and Germany was the largest importer.

 

Resumption of gas supplies from Russia through pipelines has outraged Brussels officials and diplomats from some Eastern European countries, many of which have been trying to reduce Russian energy imports for the past three years. “This is madness,” said one official. “How stupid do we have to be to even consider this?” Ukrainian President Volodymyr Zelensky said: “It is very important to end the hot phase of the conflict... Diplomatic solutions are better - fewer casualties, fewer losses.”

 

The renewed discussions about gas sales have alarmed some U.S. liquefied natural gas exporters seeking long-term gas supply deals with European companies, who fear that any resumption of transit through Ukraine could make their products uncompetitive, two officials said. The EU aims to eliminate Russian fossil fuels by 2027.

 

But the catastrophic state of EU heavy industry has forced European countries to look for cheaper energy sources.

 

Gas prices in Europe are typically three to four times higher than in the United States.

 

In 2024, the share of gas supplied by Russian pipelines amounted to about 10 percent of all gas supplies, but after the end of the Russian gas transit agreement via Ukraine to the EU in January, it was halved. The remaining pipeline through which Russian “blue fuel” enters the bloc is the TurkStream pipeline through Turkey, through which Hungary receives about 7.5 billion cubic meters of gas. Budapest, like the pro-Russian Slovak government, insists on putting pressure on Ukraine to resume gas transit. Slovak Prime Minister Robert Fico, after the suspension of Russian gas transit through Ukrainian territory, stated that Ukraine would never become a member of NATO and would have problems joining the European Union. In addition, R. Fico called V. Zelensky an enemy of his state. He demands that Kyiv continue to transit Russian gas through its territory – and plans to discuss this with the European Commission on January 30.”

 

The Nordstream 2 pipeline has not yet been blown up, so it is not necessary to transport gas through Ukraine.