Using gas to influence Germany – Nord Stream 2

Spoilers: Even though Germany imports most of its energy from Russia, Russia is more dependent on Germany than vice versa. Nord Stream 2 (NS2) can be used by Russia to influence on German and EU policy making, The recently amended EU Gas Directive, EU competition Rules and the Energy Union are preventing Gazprom and Russia to abuse its market power and use it for political aims. These laws and rules are not carved in stone. Influencing the upcoming elections to the European Parliament can be a way for Russia to influence EU policies.  

Continue reading

A hard Brexit’s a-gonna fall

Spoiler. Everyone in the EU lose due to Brexit but UK residents lose more. The short-term reduction of British GDP is around three times as large as of EU GDP. As time goes by employment rates are restored but due to less trade and lower productivity growth, GDP and welfare will be lower than without Brexit. Most of the burdens of tariffs and NTBs fall on consumers. As time goes by, we and especially UK residents will be poorer than if the UK had remained in the EU. 

Continue reading

Brexit and Sweden

Most people who try to follow the Brexit process in the British Parliament still do not know whether there will be a Brexit on the 29th of March or not. In the case of a hard Brexit consequences will be worse since firms inside or outside of Britain will not have much time to adapt to the changed conditions. The adaptions will in the worse cases mean that the current supply chains might be disrupted as the existing buyer-seller relationships may need to be replaced due to changes in costs to import and export from and to the UK. Swedish firms relying on British intermediate products may find that relative prices of these products have increased so much that new suppliers must be found. And vice-versa, Swedish firms supplying intermediate products may find that the new conditions may not make the British market profitable anymore.

Continue reading