BAKU, Azerbaijan, October 15. Energy security issues will last through 2023 and into the winter of 2023-2024, Alfred Kammer, Director of the European Department of the International Monetary Fund (IMF), said during a press briefing October 14, Trend reports via IMF.
“When you are looking at Europe currently, in July we were, in our outlook, we were concerned about a risk which could materialize if Russian gas supplies were to be shut off and there could be rationing required in the winter 23, 24, 22, 23 in a number of countries and that would lead to steep losses in economic activity. Our current assessment is that with regard to this, we are on a knife's edge.
It looks like most countries actually will be able to avoid rationing and so it can be taken care of with a price mechanism. The issue is still a risk because if the winter is cold and that is combined with the Russian gas shut off, some countries may still experience rationing despite having filled, refilled storage tanks over the summer. And the part of the energy consumption and energy compression comes in because this is not only a problem of the winter of 22-23, but the energy security issues will last through 23 and into the winter of 23-24, because in the summer, gas storage would need to be replenished and therefore we need Europe-wide compression in demand of energy that includes gas and electricity,” he said.
Kammer pointed out that the European Commission has suggested some targets.
“The packages being implemented by countries should try to achieve these targets by passing on price signals so that actually gas demand and electricity demand is being reduced. With regard to particular countries which are standing out, I think we have a plethora of measures in place across many countries. Many are targeted, but some of the measures in the same countries are broad-based. So that goes across Europe. If you are looking at some of the smaller countries which have less fiscal space, those are usually the countries where we see that they are the targeting is best and also where the fiscal cost is addressed as an issue and the fiscal packages are more efficient. So that's a general rule when we are looking at these packages.”
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