- Four of Germany's neighbors have yet to sign agreements to share natural gas supplies.
- It's a blow to energy-strapped Germany, which could tip into a recession due to energy shortages.
Energy-strapped Germany is struggling to persuade neighboring countries to sign off on a gas-sharing agreement as Europe heads toward the winter months scrambling to fill its store of energy supplies.
Denmark and Austria are the only EU countries to jump on board, with Belgium, Poland, Luxembourg, and the Netherlands refusing to sign agreements to share their natural gas supplies ahead of winter to prevent supply interruptions, according to Germany's economy minister Robert Habeck in a report shared with Bloomberg.
Habeck said the four countries have avoided "constructive negotiations" about the agreement, largely because they do not want to compensate their suppliers for redirecting natural gas to Germany.
Germany is also in negotiations with Italy and the Czech Republic, but Italy is postponing talks until after September elections, and the Czech Republic has said they would only agree to share supplies if there was a cap on the compensation its government would have to provide gas suppliers.
"There is currently no progress to be expected from negotiations about bilateral solidarity agreements," Habeck added. Fatih Birol, the leader of the International Energy Agency, previously emphasized that the 27-country bloc would need to come together and coordinate in order to get past the energy crisis safely, especially if Russia completely cuts off Europe from its gas supplies.
Although Germany reached its 80% gas storage goal nearly two months ahead of schedule, it's still suffering from soaring energy prices, which have the potential to inflict serious pain on households and plunge the German economy into a recession.
With few alternatives, the country is turning to coal and nuclear power, but even those have yet to provide households with relief from sky-high energy bills. Shortly after Russia indefinitely halted flows on the Nord Stream 1 pipeline, German baseload year-ahead power, the European benchmark, jumped 23% to 625 euros per megawatt hour, more than three times what households were paying for electricity in January and 12 times what they were paying in January 2021.