Welcome back to the Euro Intelligence Podcast.

I'm Wolfgang Munchau and with me are Zuzana Muncheng and Jack Smith.

Today we will devote the podcast to a single subject, the energy crisis in Europe and its various facets.

Jack, my question to you is, how will we get through the winter?

My short answer would be with great difficulty.

The fundamental issue, right, and I don't think this is necessarily too complex to understand,

is that not just within the EU, but on a global scale, Russia is the world's largest exporter of natural gas.

About, I think it's 85% of that natural gas in a typical year would go to Europe, the rest of Europe.

And most of that gas now has been cut off.

And I see it as a very realistic possibility, maybe even a probability that the rest of it eventually goes to.

So, you know, you're just kind of dealing with a very large shortfall in the amount of kind of natural gas and supply globally.

You're dealing with physical limits to how much liquefied natural gas the EU can import through

terminals. So really, there is going to need to be the kind of EU speak term for this is demand

reduction, whether that's kind of rationing or pricing eventually driving down demand.

In order to kind of get through the winter,

the answer is that we will simply need to be using less gas and less energy overall.

You made sort of the assumption, which I think is right, that Putin is unlikely to change his

policies. We predicted that he would do this. We had the conversation. We said he had an

incentive.

I mean, not so much that we predicted it, but we said to the extent that Putin is rational,

we can deduce from what we know that he would have to do this

because it's a the only way he has to get the West to rethink some of the sanctions.

...