Germany Should Brace for Further Gas Flow Reduction, Habeck Says

(Bloomberg) -- German Economy Minister Robert Habeck said the country should brace for Russian President Vladimir Putin to further squeeze gas imports, a decision that may trigger the next stage of the country’s gas-emergency plan.

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“Given the current situation, we must assume that Putin is ready to reduce the gas flow further,” Habeck said Wednesday on the sidelines of an air show outside Berlin. “We are preparing for all scenarios.”

Habeck said a further cut in flows could prompt the government to move to the second of a three-stage crisis plan. That move could come as early as this week, according to an official familiar with plan, who asked not to be identified.

Enacting stage two could mean a change in the law to allow energy companies to pass on cost increases to homes and businesses, meaning higher prices for industry and households. It may also involve firing up more coal-fired power plants to minimize gas consumption.

Habeck brushed aside a media report that phase two could go into effect on July 8, saying he couldn’t confirm that date. The Frankfurter Allgemeine Zeitung reported earlier that Habeck mentioned the July timing during an internal meeting of the parliamentary energy committee on Wednesday.

The government first enacted the “early warning” phase at the end of March, when the Kremlin’s demands for payment in rubles prompted Germany to brace for a potential cutoff in supply.

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