Moreover, in the extreme scenario associated with the cessation of supplies, there is also a need to “cut off” industrial companies from this energy source or at least allocate gas to them.
It is no wonder, then, that opinions are beginning to multiply on how companies affected by rising aid prices have recently, most recently the industry union proposed to them, among other things, to extend tax exemptions. In the case of energy inputs and primarily natural gas prices, the Czech industry will have no choice but to adapt to the “new reality” of dramatically higher gas prices (or close down production), and any state aid will only make this necessary adjustment at the expense of other taxpayers. , zoom out.
Russia’s aggression and CO2
Gas prices will continue to hold two factors that will not soon disappear from the political world: Russia’s aggression, which will frustrate the conflict between power ambitions and economic inability for a long time, and the Green Deal, an effort to reduce CO2 emissions in a European and global context. . The political scene and ambitions of the long-term economic leader of the EU – Germany will continue to play a specific role here.
Until recently, the assessment of natural gas as a “temporarily” environmentally friendly energy source for the EU was much more a reflection of the political game and the need for compromise within the EU than the reality of the ecological footprint associated with its use. For the EU in particular, natural gas was an energy source that was intended to address the instability of “green” energy sources for about 15 years before any future technology for storing “green” electricity from a period of abundance. Of course, due to the fact that most of the CO2 emissions associated with natural gas are generated during its extraction, not during its use, it was possible to pretend that the EU is also reducing its emission footprint in this way. But such an approach has nothing to do with reducing global emissions.
As far as Russia is concerned, all attempts to pretend to be one of several emerging global powers to be respected when striving to have “friendly” neighbors will face two challenges. The first is the dimension of the Russian economy. Its size is an economy that is unable to support Russia’s superpower ambitions. It is an economy about the size of Italy or Canada. However, Russian leaders want this economy to finance, among other things, the world’s second-largest army.
This basically makes it impossible not only to achieve a number of development goals in Russia, but more importantly it makes it impossible to positively motivate states on Russia’s borders to cooperate more intensively (for many Russian satellites, Russia is still not their most important trading partner). The second problem with Russia’s great power ambitions is its relationship to the future and trends in Russia. While China and India, for example, are achieving demographic and economic growth in ways that allow their elites to wait in peace with the knowledge that “time works for them,” Russia’s demographic trend is reversed. Time does not work for Russia.
This is further exacerbated by the Green Deal. The EU intends to dramatically reduce or eliminate its consumption of Russia’s two most important export commodities, oil and gas, over a two-decade period. And the Russian leadership knows that. Russia’s ability to achieve its ambitions internationally will deteriorate over time, so Russia’s elites must hurry. It is therefore very reasonable to fear that the conflict between ambition and reality, which will certainly not improve over time, will make Russia a state of frustrated elites who will have to maintain their position by increasingly sharpening the regime associated with occasional acts of aggression near their borders. .
It will therefore be a country with which it will be increasingly difficult and less politically advantageous for European politicians. After all, the war in Ukraine, one of which Russia’s proclaimed goal was quite absurdly “to prevent war in Ukraine,” has a second declared goal, to prevent NATO from approaching Russia. Leaving aside the fact that no one with greater decision-making power was evidently planning to join Ukraine, all indications are that one of the consequences of Russian aggression in Ukraine will be the entry of one or two Scandinavian states into the North Atlantic Alliance. It is simply always a bit difficult to be an economically weak, unpredictable and aggressive player while making friends or allies.
Words do not change reality
It follows, therefore, that Green Deal’s policy and Russia’s ambitions will be in line with the situation where, in the EU, Russian natural gas is sometimes difficult to become a generally accepted energy source at a reasonable price. In other words, natural gas will already be expensive in the EU – it probably won’t even come from Russia in the future – and something will hardly change over the decades. But then it is useless to try to return the past reality to Czech industry.
In conclusion, however, any economic aid to sectors or enterprises must be short-term, or at least temporary, in order to be compatible with the existence of a market economy and the financial stability of the state. Unfortunately, any aid to the energy-intensive natural gas-consuming industry clearly does not meet this condition for the reasons described here. At the same time, it is not worth hiding anything, this is a development for us that does not bring us anything economically, on the contrary. But with this statement, future reality will not change anyway, and our pious desires will not help either. Natural gas will already be expensive and the only way is to adapt to it, albeit painfully and at considerable cost.