This year marks the 70th anniversary of the Five Principles of Peaceful Coexistence. The commemorative conference of the 70th anniversary of the Five Principles of Peaceful Coexistence was held in Beijing on June 28. Xi Jinping, President of the People’s Republic of China, attended the commemorative conference and delivered an important speech. He expounded on the essence of the Five Principles of Peaceful Coexistence and their relevance for our times, pointed the direction for building a community with a shared future for mankind amid major global transformation, and voiced a strong message of the Global South to work with people around the world for a better future.
70 years ago, in face of the scourge of hot wars and the confrontation of the Cold War, the Chinese leadership specified the Five Principles in their entirety for the first time, namely, mutual respect for sovereignty and territorial integrity, mutual non-aggression, mutual non-interference in each other’s internal affairs, equality and mutual benefit, and peaceful coexistence. The Five Principles are included in the China-India and China-Myanmar joint statements, which jointly called for making them basic norms for state-to-state relations.
After 70 years of practice, the Five Principles of Peaceful Coexistence have set a historic benchmark for international relations and international rule of law, served as the prime guidance for the establishment and development of relations between countries with different social systems, remained a powerful rallying force behind the efforts of developing countries to pursue cooperation and self-strength through unity, and contributed historic wisdom to the reform and improvement of the international order.
Over the past 70 years, the Five Principles of Peaceful Coexistence have extended its reach from Asia to the world, transcending ideological differences, social system variations and uneven levels of development. They have become open, inclusive, and universally applicable basic norms for international relations and fundamental principles of international law, making indelible historic contributions to the cause of human progress.
Seventy years on, we are now in a volatile and unstable era where changes and turbulence are intertwined. At this historic moment when mankind has to choose between peace and war, prosperity and recession, unity and confrontation, the spirit of the Five Principles of Peaceful Coexistence has become more appealing rather than obsolete. Bearing the intertwined destinies of countries and the shared and fundamental interests of all peoples in mind, President Xi Jinping put forward the vision of building a community with a shared future for mankind, providing a new answer to what kind of world to build and how to build it. This is the best way to inherit, advance and enrich the Five Principles of Peaceful Coexistence under new circumstances.
From the Five Principles of Peaceful Coexistence to building a community with a shared future for mankind, China has remained consistent in the exploration for new ways of state-to-state relations, remained committed to our responsibility in upholding world peace and development, and remained steadfast in pursuing a just and equitable international order.
Over the past decades, the Five Principles of Peaceful Coexistence conformed to the trend for national independence and liberation in Asia, Africa and Latin America, and answered the very important question of how to handle state-to-state relations. Going forward, the Chinese initiative of building a community with a shared future for mankind has become an international consensus. The beautiful vision has been put into productive actions. It is moving the world to a bright future of peace, security, prosperity and progress.
Of all the forces in the world, the Global South stands out with a strong momentum. Standing at a new historical starting point, the great cause of building a community with a shared future for mankind requires the Global South to stay ahead of the historical trend. The Global South should be more open and more inclusive, jointly maintain peace and stability, promote open development, construct global governance, and advocate for the exchange among civilisations.
Both China and Qatar are important members of the Global South. In recent years, under the strategic guidance of President Xi Jinping and His Highness the Amir Sheikh Tamim bin Hamad al-Thani, China-Qatar relations have developed rapidly and comprehensively, serving as a model for countries with different social systems to firmly adhere to the Five Principles of Peaceful Coexistence, engage in friendly exchanges, and foster mutually beneficial co-operation.
Both China and Qatar are the staunch forces for peace, dedicated to promoting peaceful settlement of international disputes, and participating constructively in the political settlement of international and regional hotspot issues. They are core driving forces for open development, committed to restoring development as the central international agenda item with clear and feasible national development visions and goals, reinvigorating global partnerships for development, and deepening South-South co-operation as well as North-South dialogue.
China and Qatar are also construction teams of global governance and advocates for exchange among civilisations. Both countries actively participate in reforming and developing the global governance system and contribute to enhancing inter-civilisation communication and dialogue.
This year marks the 10th anniversary of the establishment of the China-Qatar strategic partnership. China wishes to work with Qatar to take this opportunity to strengthen the political foundation of bilateral relations, elevate the mutually beneficial cooperation between the two countries to a new level.
China stands ready to join hands with Qatar and other countries in the world to overcome challenges, achieve shared prosperity, create an open, inclusive, clean and beautiful world of lasting peace, universal security, and shared prosperity, build a community with a shared future for mankind, and open up a brighter future for humanity.

ATHENS, July 7, 2024 Greece: Energy and Environment Minister Theodoros Skylakakis is on the right track with his approach to Greece’s energy transition plans, a noted regional expert says.

“He’s got the right perspective,” industry veteran and author Roudi Baroudi said after Skylakakis spoke at this week’s Athens Energy Summit. “He understands that although the responsibility to reduce carbon emissions is universal, the best policy decisions don’t come in ‘one-size-fits-all’.”

Baroudi, who has more than four decades in the field and currently serves as CEO of Doha independent consultancy Energy and Environment Holding, made his comments on the sidelines of the forum, where he also was a speaker.

In his remarks, Skylakakis expressed confidence that Greece’s increasing need to store electricity – as intermittent renewables generate a growing share of electricity – would drive sufficient investment in battery capacity, without the need for subsidies. Among other comments, he also stressed the need for European Union policymakers to account for the fact that member-states currently face the cost s of both limiting future climate change AND mitigating the impacts that are already under way.

“Every country is different in terms of how it can best fight climate change. Each one has its own set of natural resources, industrial capacity, financial wherewithal, and other variables. What works in one situation might be a terrible idea elsewhere. That’s crucial and Skylakakis gets it,” Baroudi said. “He also understands that an effective transition depends on carefully considered policies, policies that attract investment to where it can not only have the greatest impact today, but also maximizes the impact of tomorrow’s technologies and tomorrow’s partnerships.”

“What Skylakakis is saying and doing fits in nicely with many of the same ideas I spoke about,” Baroudi added. “When he talks about heavier reliance on wind farms, the added storage capacity is a foundation that will help derive a fuller return from each and every turbine. When he highlights the utility – pun intended – of power and gas interconnections with other countries and regions, these are the prerequisites for peace, the building blocks for cooperation and dialogue.”

In his own speech shortly after Skylakakis’, Baroudi told the audience at the capital’s Hotel Grande Bretagne that countries in the Eastern Mediterranean should work together to increase cleaner energy production and reduce regional tensions.

“Surely there is a method by which we can re-establish the same common ground enshrined in the wake of World Wars I and II, recall the same common interests and identify new ones, and work together to achieve common goals, just as the UN Charter implores us to,” he said.

Baroudi advises companies, governments, and international institutions on energy policy and is an award-winning advocate for efforts to promote peace through dialogue and diplomacy. He told his audience that with both climate change and mounting geopolitical tensions posing threats to people around the world, policymakers needed to think outside the usual boxes.

In this way, he argued, “we might develop the mutual trust which alone can create a safer, happier, and better world for our children and grandchildren.”

“Consider the possibilities if Greece, Türkiye, and Cyprus became de facto – or de jure – partners in a pipeline carrying East Med gas to consumers in Bulgaria, Romania, and Italy,” he said. “Imagine a future in which Israeli and Lebanese gas companies were similarly – but independently – reliant on the same Cypriot LNG plant for 10-20%, or even more, of their respective countries’ GDPs.”

He also envisioned bilateral cooperation scenarios between Greece and Turkey and Syria and Turkey, as well as a regional interconnection that would provide backup energy for multiple coastal states.

“Instead of accepting certain ideas as permanently impossible, we ought to be thinking ahead and laying the groundwork,” Baroudi said. “For Greece and Türkiye – as for other pairs of coastal states in the region – a good starting point would be to emulate the Maritime Boundary Agreement agreed to by Lebanon and Israel in 2022.”

Stressing the potential for cooperation to address both energy requirements and the stability required for stronger growth and development, Baroudi – whose books include a 2023 volume about the Lebanon-Israel deal and a forthcoming one urging other East Med countries to do the same – called on the EU to take up the challenge.

“Using dialogue and diplomacy to expand energy cooperation would benefit not just the countries of the East Med but also the entire European Union and much of its surrounding ‘neighborhood’,” he told an audience of energy professionals and key government officials. “That level of promise more than merits the attention of Brussels, the allocation of support resources, and even the designation of a dedicated point-person tasked with facilitating the necessary contacts and negotiations.”

“This is how we need to be thinking if we want to get where we need to go,” Baroudi said. “Instead of allowing ourselves to be discouraged by the presence of obstacles, we need to be investigating new routes that go around them, strengthen the rule of law – especially human rights law – as a basis for the international system, and promote lasting peace among all nations. Only then can we declare victory over what the 18^th-century Scottish poet Robert Burns called ‘man’s inhumanity to man’.”

أشار أحد اهم الخبراء في مجال الطاقة رودي بارودي، في مؤتمر انعقد في أثينا، إلى أن “دول شرق البحر الأبيض المتوسط يجب أن تتعاون مع بعضها لزيادة إنتاج وتصدير الطاقة والتخفيف من التوترات الإقليمية”.

وقال بارودي امام المشاركين في المؤتمر: “يجب ان نضع في الاعتبار الاحتمالات الايجابية إذا أصبحت اليونان وتركيا وقبرص شركاء بحكم الواقع أو بحكم القانون في خط أنابيب ينقل غاز شرق المتوسط إلى المستهلكين في بلغاريا ورومانيا وإيطاليا، وان نتخيل مستقبلًا تعتمد فيه شركات الغاز الإسرائيلية واللبنانية ولكن بشكل مستقل على نفس مصنع الغاز الطبيعي المسال في قبرص”.

وأضاف بارودي “لنتصور اهمية وايجابية سيناريوهات التعاون الثنائي بين اليونان وتركيا من جهة وسوريا وتركيا من جهة ثانية إضافة إلى الترابط الإقليمي الذي سيوفر طاقة احتياطية لدول ساحلية متعددة”، لافتا إلى أنه “بدلاً من قبول أفكار معينة على أنها مستحيلة بشكل دائم، يجب أن نفكر في المستقبل ونضع الأساس لاعمال ايجابية مشتركة على ان تكون نقطة البداية الجيدة مماثلة لاتفاقية الحدود البحرية بين لبنان وإسرائيل في عام 2022”.

وشدد بارودي أمام حشد من المتخصصين في مجال الطاقة ومسؤولين حكوميين على أن “استخدام الحوار والدبلوماسية لتوسيع التعاون في مجال الطاقة لن يفيد فقط دول شرق البحر المتوسط ولكن أيضًا جميع دول الاتحاد الأوروبي والكثير من” الجوار “المحيط به وان هذا الاستحقاق المهم يستحق أكثر من اهتمام بروكسل، لا بل يستحق تخصيص موارد الدعم،وتعيين موفد مكلف بتسهيل الاتصالات والمفاوضات اللازمة”.

وختم بارودي بالقول: “هذه هي الطريقة الفضلى التي نحتاجها للتفكير إذا أردنا الوصول إلى حيث يجب ان نكون بدلاً من السماح لأنفسنا بالإحباط بسبب وجود عقبات،فنحن نحتاج إلى التفتيش عن طرق جديدة وحديثة تلتف على الافكار والمواقف القديمة، وتعزيز سيادة القانون وخاصة قانون حقوق الإنسان كأساس للنظام الدولي، وتعزيز السلام الدائم بين جميع الدول،عندها فقط يمكننا إعلان النصر على ما أسماه الشاعر الاسكتلندي روبرت بيرنز في القرن الثامن عشر: وحشية الإنسان للإنسان”.

Transatlantic Leadership Network Recognizes Author for Contributions to Peaceful Development in Eastern Mediterranean

WASHINGTON, DC November 9, 2023: Doha-based Lebanese author Roudi Baroudi was one of two people presented with the 2023 Transatlantic Leadership Award at a ceremony in Washington this week.

Although circumstances relating to the conflict in the Gaza Strip prevented Baroudi from attending the event, both he and Joshua Volz – the Deputy Assistant Secretary for Europe, Eurasia, Africa, and the Middle East and the Office of International Affairs at the US Department of Energy – were recognized by the Transatlantic Leadership Network (TLN). Each was cited at a gala dinner on Monday for his “valuable contribution in building a peaceful and prosperous Eastern Mediterranean” as part of the TLN’s 2nd Annual Conference on Freedom of the Media.

“I was deeply honored to be named a recipient of this prestigious award, and I will always be grateful for the many ways in which the TLN has supported my work for several years now,” Baroudi said. “I also look forward to working together in the future so that one day, our descendants can know the benefits of peace and coexistence. It is precisely in difficult and trying times that cooler heads must be able and willing to look at the reasons for current bloodshed and recrimination, then envision pathways to a better future.”

Baroudi, who serves as CEO of independent consultancy Energy and Environment Holding in Doha, is a long-time champion of dialogue, cooperation, and practical solutions to both the global climate crisis and recurrent tensions in the East Med. A regular speaker at regional energy and policy conferences, Baroudi’s insights are also avidly sought by local and international media, as well as governments, major energy companies, and investors.

Having advised both public and private sector actors on a wide variety of energy issues, Baroudi is widely credited with bringing unique perspective to all manner of policy discussions.  He is the author of several books, including “Maritime Disputes in the Eastern Mediterranean: The Way Forward” (2021), and “Climate and Energy in the Mediterranean: What the Blue Economy Means for a Greener Future” (2022). Together with Notre-Dame University – Louaize, Baroudi has also published a study of the US-brokered October 2022 Maritime Boundary Agreement between Lebanon and Israel, and is currently preparing another volume on Lebanon’s prospects for similar deals with Cyprus and Syria.

The TLN describes itself as “a nonpartisan, independent, international network of practitioners, private sector leaders and policy analysts dedicated to strengthening and reorienting transatlantic relations to the rapidly changing dynamics of a globalizing world.”

Monday’s ceremony was attended by a broad cross-section of high-profile figures, including senior officials from the Departments of Energy and State, numerous members of Washington’s extensive diplomatic corps, and representatives of both international organizations and various media outlets.

Qatar is participating with a delegation headed by HE the Minister of Transport and Communications Jassim Seif Ahmed al-Sulaiti in the Tbilisi Belt and Road Forum, which was inaugurated on Tuesday in Tbilisi, Georgia, under the theme: “Partnership for Global Impact”.

Inaugurated by the Prime Minister of Georgia, Giorgi Gakharia, on Tuesday, the forum saw the attendance of over 2,000 participants from 60 countries, including heads of states, ministers, diplomats and representatives of international and business organisations.

In his opening speech, Gakharia stressed the importance of the new Silk Road in modern economic integration and globalisation, saying that the participation in the initiative is among the top priorities of the Georgian government.

Georgia was one of the first countries applauding the China-proposed Belt and Road Initiative (BRI) to create new trade corridors between Europe and Asia and improve existing ones, he said.

The Tbilisi Silk Road Forum, he said, is “an important opportunity” and a platform on which the countries involved in the BRI, international organisations and the private sector discuss regional economic challenges and explore ways to overcome the challenges and share experience.

The forum is being held for the third time in Tbilisi.

It is opened by the Prime Minister of Georgia and organised by the Georgian ministries of foreign affairs, economy and sustainable development and supported by China and the Asian Development Bank.

The mission of the forum is to serve as an international platform for multilateral high-level dialogue among senior policymakers, businesses and community leaders to discuss important issues on trade and connectivity, examine challenges facing countries along the New Silk Road connecting East and West, and find common solutions that have a positive impact on the region and the global economy.

Day 1 provides opportunities to discuss a full spectrum of issues related to trade, artificial intelligence (AI), transport and energy in separate panel discussions, and Day 2 focuses on the private sector and investment opportunities in Georgia.

Meanwhile, Prime Minister Gakharia met HE al-Sulaiti in Tbilisi on Tuesday. The meeting reviewed bilateral relations between Qatar and Georgia in the fields of transportation, mobility and communications and means of further enhancing them, in addition to discussing a number of topics of common interest.

Russia’s war against Ukraine, the Sino-American rivalry, and the rise of new middle powers is spurring a profound reorganization of the international order that will leave Europe at a distinct disadvantage. To thrive in a world dominated by large states with growing military budgets, Europe has no choice but to become a real power, writes Joschka Fischer, Germany’s foreign minister and vice chancellor from 1998 to 2005, was a leader of the German Green Party for almost 20 years.

The post-1945 era of global stability is over and gone. From the bipolar world of the Cold War to the American-dominated unipolar world that replaced it, we have long benefited from a sense of strategic order. Though there were many smaller wars (and even some larger ones), from Korea and Vietnam to the Middle East and Afghanistan, the international system remained generally stable and intact.

Since the beginning of the new millennium, however, this stability has increasingly given way to a renewed rivalry between major powers, chief among them the United States and China. Moreover, it has long been clear that India, Brazil, Indonesia, South Africa, Saudi Arabia, Iran, and other emerging economies’ political and strategic influence will increase, as will their role within the global system. In the context of a deepening conflict between China and the US, these rising powers will have many opportunities to play one of the twenty-first century’s two superpowers off against the other. Indeed, many of these opportunities seem too good to miss.

Under President Vladimir Putin, Russian policy has increasingly been aimed at reversing the legacy of the immediate post-Cold War era. But the broader danger for the international system stems not from the war in Ukraine, but from the deterioration of US-China relations…

Some of the biggest losers in this confrontation are likely to be Japan and Europe. Chinese firms have built massive production capacities in the automobile industry – especially in electric vehicles (EVs) – and are now poised to outcompete the European and Japanese automakers that have long been globally dominant.

Making matters worse, America’s own response to Chinese competition is to pursue an industrial policy that will come at European and Japanese manufacturers’ expense. Recent legislation such as the Inflation Reduction Act, for example, provides large subsidies for cars produced in the US. From the US perspective, such policies kill two birds with one stone: protecting large domestic manufacturers and providing them with incentives to pursue EV development.

Not only must Europe take great pains to preserve its economic model during this reorganization of the global economy. It also must manage high energy costs, the growing digital technology gap vis-à-vis the two superpowers, and the urgent need for increased defense spending to counter the new threat from Russia. All these priorities will grow even more urgent as the next US presidential election approaches, given the distinct possibility that Donald Trump could return to the White House.

Europe thus finds itself especially disadvantaged. It resides in an increasingly dangerous region, yet it remains a confederation of sovereign nation-states that have never mustered the will to achieve true integration – even after two world wars and the decades-long Cold War. In a world dominated by large states with growing military budgets, Europe still is not a real power.

Whether that remains the case is up to Europeans. The world will not wait for Europe to grow up. If Europe is going to confront today’s global reordering, it had better start soon – or, preferably, yesterday.

Europe’s decade-long experiment with negative interest rates, which ended on Thursday with the Swiss National Bank’s return to positive territory, showed one thing: they can exist beyond the realms of economic science fiction.
Launched to revive economies after the 2007/08 financial crisis, the policy flipped standard money wisdom on its head: banks had to pay a fee to park cash with their central banks; some home-owners found mortgages that paid them interest; and rewards for the act of saving all but vanished.
With the exercise now abandoned in the face of galloping inflation brought on by pandemic and the Ukraine war, doubts linger over its effectiveness and under what circumstances it will ever be used again.
“I think that probably the bar is going to be higher in the future,” said Claudio Borio, head of the Monetary and Economic Department of the Basel-based Bank of International Settlements which acts as bank to the world’s central banks.
Rarely does monetary policy generate as much sound and fury as did the recourse in the early 2010s to negative rates by four European central banks and the Bank of Japan — now the only monetary authority still sticking with them.
With interest rates back then already close to zero, they had run out of conventional ammunition to ward off the threat of outright deflation they feared would choke off the economic recovery. The only way out, they decided, was to go below zero.
Bank chiefs fumed as the European Central Bank, Swedish Riksbank, Swiss National Bank (SNB) and Denmark’s Nationalbank went negative in moves they said undermined the whole banking business model of being able to make a profit out of lending.
Local media joined in the criticism, with Swiss newspapers in 2015 calling the moment “Frankenshock” and Germany’s Bild labelling the then ECB chief Mario Draghi “Count Draghila” for “sucking our accounts dry”.
For sure, those who relied on the return from cash savings clearly suffered during Europe’s period of ultra-low to negative rates – even if they could at least take solace from the fact that low inflation was protecting their initial savings.
Other side-effects are harder to pick apart.
Fears of negative rates leading to money-hoarding proved largely unfounded: in Switzerland, for example, the number of 1,000-franc notes in circulation remained the same, suggesting customers were not withdrawing cash to store in a safe at home.
As one Danish bank vaunted the world’s first negative rate mortgage, it is likely that cheap borrowing added steam to house price spikes across the region. But prices were often being squeezed higher by local factors including tight supply.
While many other elements have been at play, euro area bank stocks have fallen some 45% since 2014 — despite ECB moves to shield them with exemptions from charges on some deposits and access to ultra-cheap borrowing.
Yet a report to European Parliament by the Bruegel think tank last year concluded that overall bank sector profits had not been significantly harmed by negative rates, noting that the downside was being offset by gains in asset investments.
“In the end, they worked the same as normal rate cuts,” said report co-author Gregory Claeys, while acknowledging the impact may have been greater had the experiment gone on for longer.

No future?
The question of whether negative rates actually achieve their goals is harder to answer given the modest extent of the trial — no-one ever went lower than minus 0.75% — and the fact that they have been swept aside by the turmoil of the last two years.
ECB policy-makers point to data showing that lending in the euro zone was shrinking year after year in the 2010s until negative rates helped turn that into growth by 2016 — even though that growth has never attained its pre-2009 heights.
Others point to the fact that the negative rate period coincided with the vast quantitive easing with which the ECB and other central banks around the world also boosted demand with trillions of dollars of asset purchases.
“That was a much bigger deal — much more impactful,” said Brian Coulton, chief economist at Fitch Ratings. “Using your balance sheet aggressively — that is a powerful weapon.”
Some economists argue negative rates create perverse incentives that ultimately do a disservice to the economy — for example by keeping alive “zombie companies” that by rights should fold, or by removing the impetus for governments to push tough reforms.
“What is lacking, in Europe, is the focus on structural reforms. Why didn’t they happen in the last 10 years, why didn’t we strengthen productivity growth?” said Societe Generale senior European economist Anatoli Annenkov.
Burkhard Varnholt, Chief Investment Officer Switzerland, Credit Suisse Switzerland, goes further, saying the message they send about investing in the future was even akin to the nihilism of the No Future refrain of the 1977 Sex Pistols’ punk rock track God Save the Queen.
“It’s the central bankers who have taken interest rates to a level where we attach no value to the future,” he said. “Today’s punks wear white shirts, grey suits and a blue tie.”
As the negative rate era closes, the global pool of assets with negative yield has shrunk to less than $2tn from a 2020 peak of some $18tn.
Despite the misgivings, others say the experiment has at least shown policy-makers that rates can go below zero and so is an option for them: witness the fact the Bank of England for a while considered that path as Covid-19 was ravaging the economy.
Even if the current inflationary bout means it could be a while before Europe’s central bankers need to use negative rates again, it is unlikely they will want to rule them out.
“They will always be spoken of as something that remains in the toolkit,” said Rohan Khanna, strategist at UBS in London. “I am very doubtful anyone here is ready to say never again for negative rates.” — Reuters

Much of the conventional wisdom about Europe’s current natural-gas crisis – triggered by reduced deliveries from Russia – rests on two assumptions: that the German economy depends on cheap Russian gas, and that this bet has gone spectacularly wrong. But while German industry is strong, and the country imports a lot of natural gas from Russia, a closer inspection of the numbers and economics involved does not support the prevailing narrative.
For starters, natural gas does not play a large enough role to drive an industrial economy. In 2019, gas imports via pipeline cost Germany $30 billion, representing only 0.75% of its GDP, and the overall value of the country’s gas consumption was below 2% of GDP. These modest ratios are similar across industrialised economies and suggest that cheap gas imports are highly unlikely to be a major growth factor. Moreover, even though gas consumption has stagnated in Germany and most of Western Europe over the past two decades, the economy grew, albeit slowly.
The argument that cheap Russian gas might have favoured Germany more than other countries also is not backed up by the numbers. In 2019, Germany accounted for only about 2.3% of global natural-gas consumption, but 4.5% of world GDP. Germany’s gas intensity per unit of GDP is thus about one-half of the global average, much lower than that of the United States and many other industrialised countries, including Japan and South Korea.
European economies tend to be thriftier in their energy use than the rest of the world. But even within Europe, Germany performs well, with lower gas consumption per unit of GDP than other large European economies, such as Italy and Spain. This is surprising since these two Mediterranean countries have much less need for heating in winter (and air conditioning in summer requires an order of magnitude less power than heating). Only France, with its large nuclear-power sector, is less dependent on gas.
A similar picture emerges from related metrics, such as the value of energy imports as a percentage of GDP, or gas usage for industrial purposes as a share of industrial value added. All these indicators show that the German economy uses energy less intensively than most others.
The idea that German industry gained an advantage from access to cheap Russian gas ignores the reality that there is a European gas market with, up to now, only small differences in wholesale prices across countries. One could of course argue that Russia sold its energy cheaply to Germany to make the country dependent. But the data challenge the common perception that Germany receives cheap gas.
Over the past decade, German industry has paid about 10% more for natural gas than its competitors in other major European economies. Supplies from North Sea fields have enabled British industrial firms to pay even less than their continental peers, but this does not appear to have helped them much.
The implication is that Russia obtained a non-economic benefit (German dependence on its gas supplies) for almost no cost. The inverse of this is that Germany experienced a loss of energy independence without gaining a noticeable economic advantage.
The one large economy that is both energy-intensive and has cheap natural gas is the United States. The average US citizen uses more than twice as much natural gas as a European – 25 megawatt-hours per year for the US, compared to about 10MWh for European countries. Moreover, US natural-gas prices have been somewhat lower than German or EU prices for most of the past two decades, and are now only a fraction of the European price, as European prices have increased by a factor of five, whereas US prices have changed little. Despite this cost advantage, however, the manufacturing industry of the US – and that of the United Kingdom – has not grown particularly strongly.
Adjusting to a world without Russian gas is of course a major problem for Europe. Yet, although Germany seems more vulnerable because it used to receive a large share of its gas from Russia, this can change quickly. Germany is building new regasification capacity in record time to allow the country to import the quantities of liquefied natural gas needed to fill the gap between lower Russian supplies and domestic demand, which is already falling because of high prices.
Once this import capacity has been constructed, Germany will be in the same situation as its European neighbours, which also have to bid for LNG. Prices are likely to stay high for some time. But with an energy intensity below the EU average, Germany should be able to bear the burden slightly better than Italy, Spain, and some Eastern European countries. France, of course, will be much less affected, at least if its nuclear reactors can resume full production.
We should also not forget the global picture. Bottling up a large percentage of Russian gas (which is what will happen if Europe no longer buys from Russia) increases the global gas price, which affects Asian countries as well, because they compete with Europe on LNG. South Korea and Japan have a higher energy intensity than Europe, and even China imports large quantities of LNG, at a price similar to what European countries pay.
Expensive energy, particularly natural gas, poses a difficult economic and political challenge for all energy-importing industrialised countries. Only the US and some other smaller energy producers such as Norway, Canada, and Australia benefit from this situation. But the data suggest that Germany is better placed to weather this crisis than most of its main competitors. — Project Syndicate

* Daniel Gros is a member of the board and a distinguished fellow at the Centre for European Policy Studies.