Poland began the fight against Germany for energy resources
Poland accuses Germany of being selfish for wanting to help its industry buy gas amid the biggest energy crisis since World War II. Warsaw, of course, would like the entire European Union to chip in for expensive gas. However, the dissatisfaction of the Poles is also understandable. Germany will be able to save its factories in winter only by taking gas from neighboring countries. The problem with the EU is that every man will be for himself this winter.
The other day, Germany announced its plan to allocate 200 billion euros to support the German industry, which is suffering greatly from high gas prices, and to abandon the gas tax, which was supposed to be introduced from October 1. Factories in the country are reducing production or closing. It would seem that support from the state in such a difficult time is such a logical and natural policy on the part of the German authorities.
However, Poland does not think so. Polish Prime Minister Mateusz Morawiecki accused Germany of selfishness.
“It cannot be that the energy policy of the European Union is implemented under the dictation of Germany. We remember well how the German state taught others during the COVID period or earlier during the financial crisis. Today, this very state, using the powerful force of its economy, its capital, wants to allocate huge funds, and specifically 200 billion euros, to help only its industry,” the Polish prime minister said.
“Of course, we are doing everything to help Polish households – with gas prices, with electricity prices. All Poles know about it. But we also want to fight for our industry. It cannot be that the Polish industry is in a worse position than the industry of Germany, Austria or other countries of the European Union,” added the Polish politician. In his opinion, Germany’s actions to support its gas importers are destructive for the entire EU.
“Part of Poland’s dissatisfaction can be understood because over the past twenty years in the European Union, with the very active support of Germany, France and other countries of Western Europe, there has been a reduction in direct and indirect subsidies to both state-owned enterprises and the private sector. One of the high-profile stories occurred in the aviation industry, when the airlines of Italy or Eastern Europe, in particular the Baltic countries, could not work normally and asked for state assistance. However, their governments, when providing assistance to their airlines, faced sanctions from the EU. Because Brussels considered that this violates the principles of fair competition, and other European countries are in a worse position than those where companies were assisted,” says Sergey Kondratyev, deputy head of the economic department of the Institute of Energy and Finance.
However, on the other hand, it is Poland that is the largest recipient of grants and European assistance as part of the financing of infrastructure funds and equalization funds, and it is Germany, as the main donor, that helps the Polish economy through these funds, Kondratiev notes.
As for Germany, the gas crisis actually hit it harder than France or Austria. In general, it hits different EU countries in different ways.
“France and Austria, for example, are in a better position than other countries in Western or Central Europe because they have a more diversified generation mix. France is dominated by nuclear energy, and Austria has a fairly high share of hydropower, so the crisis will affect them somewhat less than, for example, Germany, which is quite heavily dependent on gas imports,” explains the deputy head of the economic department of the Institute of Energy and Finance.
Therefore, Germany’s desire to help its industry – the locomotive of the entire EU – is quite understandable. On the other hand, 200 billion euros in aid could worsen the situation of enterprises in neighboring countries, including Poland. How?
“Europe in this winter period will face not only high prices, but also a physical shortage of energy resources. But price will play a role. Thanks to subsidies, German enterprises will be able to pay more for energy resources, and accordingly, they will be able to physically receive more of them. This means that some other factories will be left without this energy and will not be able to work normally. And these may well be Polish companies,” explains Kondratiev.
As you know, the Polish economy is based on coal, but some companies in the country still use natural gas, selling prices for which have increased many times over. “Therefore, Poland is trying to achieve pan-European assistance, similar to how, for example, the mechanism for recovering from the pandemic and coronavirus operates. Probably, Warsaw wants to be given a loan, or rather a grant at no cost, ”the source says.
But again, now no one in the EU prevents Warsaw from increasing coal imports and maximizing its own coal production in the country. Although a year and a half ago it was impossible to imagine, because coal is the most non-environmentally friendly fuel. In addition, it is worth reminding Polish politicians that, unlike Germany, they have deprived themselves of a serious part of the gas. Poland refused to buy gas from Gazprom back in the spring, declaring confidently that it could manage without it. Warsaw was the first in the EU to impose sanctions against Gazprom and achieved retaliatory sanctions and the inability to use the Yamal-Europe gas pipeline. By the way, Germany is one of the main recipients of gas through this pipeline. Berlin also has something to be offended by.
Germany as a whole lost Russian gas through Nord Stream 1, also not entirely of its own accord, but because of the sanctions of Canada, the UK and the EU, which led to technical problems in the operation of the gas pipeline. The fact that German politicians did not have enough strength to quickly resolve the problem is another matter. Now Berlin has been deprived of this opportunity, having blown up both Nord Stream 1 and Nord Stream 2. Their recovery, if it takes place at all, may take more than one year.
According to Kondratiev, Poland’s idea of distributing money to all EU countries for gas purchases is not effective, because this assistance will in no way change the volume of gas purchases by each country.
“The meaning of the German plan is precisely to draw part of the energy resources from the neighbors to itself,” the source notes.
First, Germany and Poland claim the same Norwegian gas. Poland has finally built (with common European money, by the way) the Baltic Pipe gas pipeline from Norway. But before that, Germany was the main old buyer of Norwegian gas. Poland is a new client of Norway in this regard. And Norway does not produce new volumes of gas because of old fields. This year, at the request of the afflicted, she managed to slightly increase production to the detriment of oil production – and that’s it. Germany and Poland will fight for uncontracted volumes of Norwegian gas. It is logical that the one who can pay more will win.
Secondly, Poland receives LNG through its terminal in Swinoustia. However, Kondratiev does not rule out that the Polish traders who buy this gas may start selling it to German rather than Polish consumers, because the Germans will be able to pay.
It is curious that Poland, in fact, has a choice – instead of blaming Germany and demanding money from the entire EU, the Polish authorities can help their own economy themselves.
“Poland can follow the example of Germany. If it does not have money in the budget, then it can enter the borrowing market, take out loans and support its real economy. Or Poland can cut taxes for industry. There are many options to help yourself without blaming others. And such assistance is unlikely to raise any questions for Poland from Germany, for example,” the expert says.
In fact, so far only one Poland communicates so ugly and sharply with its neighbors, or rather, with one neighbor – Germany.
“France, for example, does not cause such a nervous reaction from the Polish authorities. Although Paris is actively helping its real sector of the economy by limiting electricity prices. The EC, of course, is unhappy with this, but none of the European countries so clearly indicated to France that it should not do this and should urgently return exclusively to market mechanisms, ”an expert from the Institute of Energy and Finance gives an example.
In the past few months, Poland has generally intensified the conflict with Germany. She suddenly began to demand war reparations from Germany and was refused, the Poles periodically pedal the topic that Germany is taking some resources for itself.
“We are talking about the confrontation between the two large economies of the EU. Poland is the fifth economy, and Germany is the first. This could become a serious challenge for the European Union,” concludes the interlocutor. It is obvious that in such a difficult situation – and Europe has not faced such an energy crisis since the Second World War – each member of the EU will think of his own skin and help himself, and for this he will be forced to take resources from his neighbors.
Olga Samofalova, VIEW
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