German Chemical Giant Warns Of 'Total COllapse' If Russian Gas Supply Cut

German Chemical Giant Warns Of "Total Collapse" If Russian Gas Supply Cut

 TYLER DURDEN

CEO of Germany's multinational BASF SE, the world's largest chemical producer, has warned that curbing or cutting off energy imports from Russia would bring into doubt the continued existence of small and medium-sized energy companies, and further would likely spiral Germany into its most "catastrophic" economic crisis going back to the end of World War 2. 

Company CEO Martin Brudermuller issued the words in an interview with Frankfurter Allgemeine newspaper just ahead of German officials by midweek giving an "early warning" to industries and the population of possible natural gas shortages, as Russia appears ready to firmly hold to Putin's recent declaration that "unfriendly countries" must settle energy payments in rubles, related to the Ukraine crisis and resultant Western sanctions. 

According to Bloomberg he mused that while "Germany could be independent from Russia gas in four to five years" it remains that "LNG imports cannot be increased quickly enough to replace all Russian gas flows in the short term."

But in the meantime, Brudermuller described that "It's not enough that we all turn down the heating by 2 degrees now" given that "Russia covers 55 percent of German natural gas consumption." He emphasized that if Russian gas disappeared overnight, "many things would collapse here" - given that "we would have high levels of unemployment, and many companies would go bankrupt. This would lead to irreversible damage." He continued:

"To put it bluntly: This could bring the German economy into its worst crisis since the end of the Second World War and destroy our prosperity. For many small and medium-sized companies in particular, it could mean the end. We can't risk that!"

The dire warning of coming disaster in the event Russian gas is shut off came in response being questioned over whether it's at all possible to abandon Russian energy. 

Asserting that this issue is not "black and white" - and that the German economy stands on the brink of catastrophe, the BASF CEO said that if this standoff continues to escalate it will "open the eyes of many on both sides"...

Separate sources estimate that at Ludwigshafen alone this scenario would immediately lead to some 40,000 employees being possibly laid off, or at least put on short-time working hours. 

He warned further in the interview that many Germans are currently greatly underestimating the consequences of what Russia shutting off the taps would mean... nothing less than a historic crisis:

"Many have misconceptions. I notice that in many of the conversations I have. People often make no connection at all between a boycott and their own job. As if our economy and our prosperity were set in stone."

He explained that higher prices are already having a huge impact on the food supply given at this point BASF has been forced to reduce the production of ammonia for fertilizer production.