Not Many Alternatives to Russian Gas, Says Germany

German Economy Minister said that there are “no sensible alternatives” to Russian gas, a few hours before Hungary voiced its opposition to economic sanctions against Russia.

Germany’s Minister Sigmar Gabriel did say that Russia is a reliable gas supplier, which “even in the darkest hours of the Cold War … respected its contracts.” Gabriel’s declaration to Neue Osnabruecker Zeitung hints that Germany is at most planning minor adjustments. 

Europe’s natural gas prices would have to double if the Old Continent wanted to lure LNG to replace Russian supplies, wrote Bloomberg on Friday. This price issue would be a high hurdle for a radical change of strategy, implicitly confirming Gabriel’s statement.

Meanwhile, Ukraine remains in the backdrop with its problems. The country is on the brink of the bankruptcy, with a current account shortfall of over 9%.

Kiev agreed with the International Monetary Fund a $14-18 billion bailout package. The parts are discussing disbursement of $3 billion in the first tranche, after Ukrainian Parliament passed the some reforms required in the IMF’s financial package.