If Russia cuts off the gas, there will be a collapse of the Euro. Word of Barclays. “The euro will protect you” … ..

The Euro could fall below par with the US Dollar due to the Eurozone economic recession resulting from energy rationing if Russia cuts off gas to Europe, according to Barclays estimates.

" Our economists estimate that a total loss of Russian supplies, combined with rationing of economic activity, could dent euro area GDP by more than 5 percentage points in one year," Barclays economists wrote in a published statement. from Reuters .

Furthermore, if Russia shuts off the supply of natural gas to Europe, the EUR-USD will fall below par, the investment bank added. A strong devaluation linked to the loss of competitiveness of the European economy.

Since the start of the war in Ukraine, the euro has fallen by around 8% and is currently at $ 1.03.

Russia has already cut off gas supplies to two EU member states, Poland and Bulgaria , and is reportedly threatening to stop deliveries to Finland as well, due to its Scandinavian neighbor's choice to apply for NATO membership. .

While some buyers, such as Poland and Bulgaria, have refused to pay in rubles for Russian gas, others have begun to prepare for this possibility.

Ten other European buyers of Russian gas have opened accounts with Russia's Gazprombank, designated by Vladimir Putin to process ruble payments for gas it requires from now on, a source close to Gazprom told Bloomberg Thursday. So far, 20 European companies have already opened accounts with Gazprombank and another 14 have requested the documents necessary to open such accounts, the Bloomberg source said. Among these companies are the Italian ones.

At the same time, Russian gas supply to a Gazprom subsidiary that Germany placed under trusteeship in April was cut off, German economy minister Robert Habeck told parliament on Thursday. Gazprom deems German expropriation illegal. Sanctions were then imposed by Russia on all of Gazprom's European branches, which are now no longer able to sell Russian gas and therefore have lost the meaning of their own existence.

Russia on Wednesday imposed sanctions on Gazprom branches in Europe, banning them from supplying Russian gas.

The economic damage deriving from the possible interruption of the Russian gas supply would be such as to go well beyond the Eurozone. The economies of Central and Southeast Europe, the Western Balkans, North Africa and Central Asia could see their post-COVID recovery in jeopardy if Russian gas supplies are further disrupted, the European Bank for Reconstruction said. and Development (EBRD) in a new report released last week. What started out as a local conflict is increasingly turning out to be an epochal and global disaster that damages every sector of the economy and marks the economic end of Europe. Furthermore, this story teaches one important thing: it is not money that protects an economy, but a careful, intelligent and not short-sighted policy. That is all that Brussels cannot produce.

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The article If Russia cuts gas there will be a collapse of the Euro. Word of Barclays. “The euro will protect you”… .. comes from ScenariEconomici.it .

This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/se-la-russia-taglia-il-gas-ci-sara-un-crollo-delleuro-parola-di-barclays-leuro-vi-proteggera/ on Fri, 13 May 2022 17:42:29 +0000.