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Shutdown of Nord Stream 1 could cause severe recession in Europe

Shutdown of Nord Stream 1 could cause severe recession in Europe

ArabFinance: A complete cut of Russia's natural gas supply would cause a severe recession in the Eurozone and boost inflation, Reuter reported on September 5th, citing an insight from Moody's.

Measures taken by companies and governments in Europe to alleviate the impact of shortage in natural gas have mitigated credit risks, but did not erase them, Moody's said.

Moody's noted that the suspension of the Nord Stream 1 pipeline affected sectors that rely heavily on energy including chemicals, automotive, and manufacturing in countries that depend the most on Russian energy supplies.

Utilities in Europe will be "among the most exposed" due to the inflation in natural gas and electricity prices, the rating agency maintained.

On September 2nd, Russian gas producer Gazprom announced that gas supplies to Germany have been halted due to a gas leak.

 

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