Germany Prepares For ‘Worst’ As Investor Outlook ‘Collapses’
"Economic expectations collapse," read the headline atop the July vintage of Germany's ZEW survey.
It's hardly surprising that "the experts," as ZEW calls investors, are feeling a bit anxious about the world's fourth largest economy. After all, Germany is staring down the prospect of a severe recession tied to the prospective cessation of Russian gas flows following scheduled maintenance to the Nord Stream.
Economy Minister Robert Habeck is worried the Kremlin will find an excuse not to resume
Germany appears to be doing slightly more about the LNG supply shortage than they are actively publicizing.
The Russian LNG gap (Russia accounts for 33% of total annual German imports of 143 billion cubic meters of natural gas) will be partially filled by 3-4 off shore LNG terminals that will be operated by Germany’s energy company (RWE) and funded at a cost of 8B euros by the German government. Two are expected to be operational by this winter, supplying 10-14 bcm annually, In addition, increased production at LNG terminals in the Mediterranean (supplied by Algeria and Libya) is being arranged. The LNG terminals on the northwest coast of Europe (Netherlands, etc.) are also reported to be increasing capacity.
The best thing about Putin and Xi not functioning as moral global citizens is that democratic, capitalist (mostly) free-trade tribes will hopefully stop putting themselves in a position where they are completely vulnerable and reliant on evil, untrustworthy dictatorships (fwiw- it might be ok to be a “little” vulnerable and reliant).
In addition, nuclear is looking more and more like the global energy solution for the future – which is great news.
Finally, German luxury item exports to China might be at an all time high in 2022. China has replaced the US by a substantial margin as the largest market for Porsches.