Europe can go without Russian gas for six months, but beyond that the economic impact would be severe, a senior IMF official told AFP.
Alfred Kammer, head of the IMF’s European department, urged countries in the region to take a range of measures to soften the blow, including cutting consumption to build up stocks.
The region depends on Russia for the vast majority of its energy needs, particularly natural gas, and IMF economists have examined the economic cost of Moscow’s loss of supplies.
“In the first six months, Europe can cope with such a shutdown (by) having alternative supplies (and) using existing storage,” he said in an interview on the sidelines of the Spring Meetings. of the IMF and the World Bank.
“However, if this gas cut were to last until winter, and over a longer period, it would have significant effects” on the European economy, he said.
Western countries have considered putting an embargo on Russian energy in retaliation for its invasion of Ukraine, while Moscow could also suspend exports to retaliate against damaging sanctions already imposed on the government.
The International Monetary Fund predicts that a total loss of Russian gas and oil supplies could cost the European Union 3% of GDP, depending on the severity of the winter.
He called for measures to prepare for this eventuality.
“There is no single option, which has a big impact, but many smaller measures will have a bigger impact,” he said, including finding alternative suppliers, which some countries have already started doing.
– No recession –
Consumers also have an important role to play and governments can raise awareness through “public campaigns to reduce energy consumption”.
“The consumer can act now,” he said, and the reduced consumption means more fuel can be stored in the event of a supply disruption.
Although the war in Ukraine has severely slowed growth, Kammer said it “will not derail the recovery” and that he does not expect a Europe-wide recession.
The main economies of the euro zone, with the exception of Spain, will be “weak in 2022” and will experience one or two quarters of growth close to zero, or even a technical recession with two negative quarters.
But the IMF expects these economies to recover in the second half of this year.
– “A boon” –
Russia’s attack on its neighbor has also caused an influx of around five million refugees, creating a challenge for European countries that face budget constraints in the face of the influx.
Poland, which received the most Ukrainians, is particularly affected.
What happens to these people, mostly women and children, after the war remains a question.
“Some of these refugees will stay in Europe, I’m sure,” said Kammer, who noted that this could be “a boon” for countries facing an aging population and a lack of workers.
“But it could be bad for Ukraine if too many refugees stay.”