OREANDA-NEWS  The situation with the reduction of gas supplies from Russia to Europe forces German banks to start preparing for a possible deterioration of the situation. Institutions need to set aside additional funds to cover a potential surge in defaults of local companies in case of termination of Russian fuel supplies, Bloomberg reports, citing bankers' statements.

In mid-June, a number of European countries noted reduced volumes of gas supplied from Russia. Gazprom explains the reduction in supplies by technical problems of the Nord Stream pipeline and the unavailability of gas transit through the Sokhranovka gas measuring station (GIS). The station has been closed by the Ukrainian side since the beginning of May due to military operations.
The gas shutdown could lead Germany into recession, and creditors will have to support companies with more financing, said Lutz Diederichs, head of BNP Paribas Germany. Creditors see risks of lowering the country's energy security due to planned repairs on the main gas pipeline from Russia to Germany, Nord Stream. Two high-ranking bankers, whose names the agency does not name, said that there is a possibility that gas supplies will not resume after the end of maintenance. Gazprom planned to suspend the operation of the gas pipeline in the period from July 11 to July 21.

The agency notes that the financial reserves of German banks, postponed in case of possible economic consequences of the special operation in Ukraine, are currently less than the reserves created against the background of the coronavirus pandemic. The country is heavily dependent on gas imports from Russia, and a complete loss of energy supply will deal a heavy blow to Europe's largest economy.