Von der Leyen: Russian war causing 'thick fog of uncertainty for investment'

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Since the start of Vladimir Putin’s brutal invasion of Ukraine, Europe has aimed at ending its reliance on Russian oil and gas, Moscow’s largest exports. As the fuel-starved EU countries look for alternatives to Russian exports of energy, Madrid has argued that Spain and the rest of Southern Europe have the capacity to replace the shortfall in gas supplies from Russia.

Spanish Prime Minister Pedro Sanchez has pointed out that Madrid represents 37 percent of the European Union’s total capacity for regasification.

Regasification is the process of converting natural gas back to a gaseous state by heating the liquified gas.

Mr Sanchez also said that the Iberian peninsula, which the country shares with Portugal, is home to around half of the bloc’s LNG storage.

Speaking to CNBC, Mr Sanchez said: “Spain and, I would say, Southern Europe, will have a chance to provide an answer to this energy dependence of Russia fossil energy.

“This war also gave us a very important lesson, which is that renewable energy, hydrogen, energy efficiency is not only a great ally for countries and economies to tackle the climate change efforts but also in this very complex and very uncertain geopolitical scenario that will provide us also means to increase our resilience and autonomy.”

Russia’s invasion of Ukraine intensified an already crippling energy crisis in Europe, with wholesale gas prices tripling between February 16 and March 7, according to the Dutch TTF hub, a European benchmark for natural gas trading.

Spain has been one of the most vocal advocates for issuing a price cap on energy exports.

Together with Portugal, Spain broke EU ranks by introducing a temporary price cap on coal and natural gas.

Mr Sanchez added that the EU’s energy market is not fit to respond to the current crisis.

He said: “This is just the beginning of a big reflection that we need to face at the European level.”

Spain has also announced that it is ready to launch a coordinated “Mediterranean front” together with Italy, Portugal and Greece to tackle the impacts of Russian gas shortages.

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Mr Sanchez noted that Spain and Southern Europe is well prepared to deal with shortages, and they “will have the opportunity to respond to this energy dependence on Russian fossil energy.”

This comes as EU Commission President Ursula von der Leyen warned of economic consequences as a result of Russia’s invasion and the energy crisis.

In an address from the World Economic Forum in Switzerland, she said: “This conflict is also sending shockwaves through the world, further disrupting supply chains already stretched by the pandemic.”

She continued: “It is putting new burdens on businesses and households.

“It has created a thick fog of uncertainty for investors across the globe.

“More and more companies and countries, already battered by two years of Covid-19 and all the resulting supply chain issues must now cope with rising prices for energy as a direct result of Putin’s unpardonable war.”

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