Bloomberg reported today, Monday, that German banks fear large defaults in Germany after cutting gas supplies from Russia to Europe’s largest economy.
“Banks in Germany will be forced to allocate additional funds to cover a possible increase in defaults if the country is cut off from Russian gas,” the agency said, citing senior representatives of the financial sector.
According to the agency, this scenario will lead to a recession in Europe’s largest economy, in particular, lenders in Germany are paying special attention to the planned maintenance work of the Nord Stream gas pipeline, and two senior bankers, who asked not to be named, said that there is a possibility that that gas supply operations will not resume after the end of the journey.
Natural gas supplies from Russia to European countries, including Germany, via the Nord Stream gas pipeline (a gas pipeline from Russia to Germany under the Baltic Sea) decreased in mid-June 2022 due to technical problems, as Canada refused to return gas turbines to Russia after their detention under the pretext of sanctions imposed on Moscow.
And at the end of last week, Nord Stream, the company responsible for the operation of the Nord Stream gas pipeline, announced a temporary halt in the pumping of gas from Russia to Europe for maintenance work.
The operator’s statement today, Friday, says that Nord Stream will be closed from July 11 to July 21 for scheduled maintenance work.
Source: RIA Novosti