Russia invades Ukraine: That means war for Germany

Russia has invaded Ukraine – the worst fears of recent weeks have materialized: war is raging in Europe. Russian troops are invading the neighboring country from the north, east and south, and Putin’s soldiers are firing rockets at western Ukraine. Reactions to the aggression around the world range from worried to horrified.

The first effects can already be felt:

Oil and gas prices shot up quickly after the first reports of the Russian invasion, because Russia is Germany’s most important energy supplier. Despite relatively empty gas tanks and the end of the Nord Stream 2 pipeline, Economics Minister Robert Habeck (Greens) does not expect bottlenecks in the gas supply. The federal government has taken precautions to ensure that there is enough gas, he said. Habeck expects that the gas price will remain “at a higher level than before the winter”, “but at a level that is manageable”.

Electricity and gas prices are likely to rise

In order to cap the currently higher energy prices, the traffic light coalition will suspend the EEG surcharge. Germany’s largest energy supplier Eon cannot yet say anything about the specific effects on electricity and gas prices. The wholesale markets are currently seeing a renewed increase in the prices for electricity and gas, and “there is much to suggest that prices will remain high for longer,” says the Essen-based company.

Investors are also feeling the pain of Russia’s attack. In Frankfurt and Paris, the indices fell by more than four percent at the start of trading and continued to fall, and the stock exchanges in London and Moscow themselves and in Asia also turned negative. Investors fled to supposedly safe havens like gold, which hit its highest level since early 2021. In Russia, the ruble, the country’s currency, fell 9 percent against the dollar, hitting an all-time low.

As long as Russia’s war against the neighboring state is concentrated on its territory, Germans will primarily feel the economic consequences. Although Russia, with a volume of 27 billion euros, is not an important trading partner for the Federal Republic, its dependence on oil and gas and “base metals is already a potential brake lever for the German economy,” says Dekabank chief economist Ulrich Kater of the DPA news agency . On top of that.

The war in Ukraine could also have an impact on other levels:

For example, with new refugee movements

The Russian attack drives many Ukrainians to flee. The US government estimates that up to five million people could leave their homes. Many of them will initially move to neighboring Poland to the west. From there, the way to Germany is not far. Federal Interior Minister Nancy Faeser (SPD) announced “massive” aid for the receiving countries. In Germany, too, precautions are being taken in politics and civil society for the reception of refugees – a reopening of initial reception facilities is being considered.

On the defense budget

Army Inspector Alfons Mais, one of the highest-ranking soldiers in the Bundeswehr, vented his displeasure with unusual frankness: Now there is war in Europe, “and the Bundeswehr, the army that I am allowed to lead, is more or less blank,” complained Mais. The Bundeswehr had been saved to death. One can predict that Germany will have to spend more on its defense in the future. The defense budget has increased significantly in the last five years – from 37 billion euros in 2017 to 50.5 billion euros in 2022.

Cyber ​​attacks by Russia

Russia not only wages war on the ground – but also on the Internet. The country is considered by German security authorities to be one of the most important perpetrators of cyber attacks. The German authorities are already ramping up their defenses in anticipation of such attacks, the Interior Ministry said. In the past few days, the authorities for the protection of the constitution had advised institutions and companies in the important infrastructure to strengthen their IT protection. Ukraine reported massive cyber attacks before Russian troops invaded.

In travel

Ukraine has closed its airspace to civilian aircraft for safety reasons. This means that flights from Europe to the Far East, for example, have to take a detour. Publicly available flight trackers such as Flightaware.com showed many jets circumnavigating Ukraine south via the Balkans and Turkey. Air traffic over Ukraine has been limited since a Malaysia Airlines flight was shot down over eastern Ukraine in 2014. It would be more serious if Russian airspace were closed – important flight corridors pass through here.

Swell: DPA, AFP