European reliance on Russian gas has always been a weapon available to Vladimir Putin. Now winter is coming, and Putin is using it to exert maximum pressure to test the resolve of the EU countries that are most dependent on Russian gas, in the hope that he can find cracks in the West’s collective position. This week Gazprom announced that Russia-to-Germany gas flows via the Nord Stream pipeline will fall to about 20 per cent of normal capacity, halving the current supply.While the EU will feel the brunt of the coming supply crunch, the UK cannot escape the knock-on effects on prices. Households have already seen huge increases to energy bills. Unfortunately, the worst is yet to come.Last week, the European Commission warned that a complete Russian shutoff was likely and that EU countries should reduce their gas consumption by 45 billion cubic meters (bcm) from August to March – equivalent to an EU-wide cut of around 15 per cent. This week, EU energy ministers reached a watered down deal that, when accounting for various carve-outs, produces a gas savings target of closer to 10 per cent, or around 30 bcm, according to analysts.Island states such as Malta, Cyprus, and Ireland, which do not have a direct connection to the European grid, are fully exempt from the target. As are countries whose electricity systems are connected to the Russian grid and which would need to burn gas for electricity should Moscow completely cut them off – such as the Baltic states.EU Energy Commissioner Kadri Simson has previously said that the gap between supply and demand “would be around 30 bcm in an average winter, 45 bcm in a colder one, and even larger if the winter is exceptionally cold — and we assume that non-Russian [liquefied natural gas] and pipeline supply will remain high through the winter.” Therefore, the deal reached this week might not be enough to cover any shortfall if this winter is colder than average or if there are any issues with non-Russian supply.Due to the legacy of strategic miscalculations under Angela Merkel, Germany is among those countries that would be worst affected by a Russian gas shutdown. Germany’s decisions to phase out its nuclear generating capacity and double down on Russian gas are now coming home to roost, and sympathy from fellow EU member states has been limited.A decade ago, the eurozone debt crisis tested European solidarity to the limit. Germany insisted that the southern members of the single currency do their fiscal “homework” after living beyond their means. “We can’t have a common currency where some get lots of vacation time and others very little,” Angela Merkel told a party conference in 2011. Eurozone members in receipt of financial aid were subject to tough austerity measures that were both economically and politically painful.Now the shoe is on the other foot and there has been some notable reluctance to bail out Germany following its strategic blunder on energy security. Several member states pushed back strongly against the European Commission’s original proposal for gas rationing. The main argument being that it’s unfair to ask the same level of effort from all countries, when some are much more dependent on Russia than others. In a thinly veiled jibe at Germany, Spain’s Energy Minister Teresa Ribera Rodríguez said, “Unlike other countries, we Spaniards have not lived beyond our means from an energy point of view.”Greece, Portugal, Italy, and Cyprus – all on the receiving end of lectures on fiscal rectitude from Berlin throughout the eurozone crisis – also opposed the Commission’s original gas plan. Meanwhile, the Polish government’s spokesman, Piotr Müller, suggested that Germany is making selective calls for solidarity. “I would like to see the same solidarity on the part of Germany by supplying arms to the east of Ukraine in order to make Europe safer,” he said.The economic impact of a cessation of Russian gas exports is likely to be severe. Since April, the IMF has already revised down its projections for EU growth to 2.8 per cent in 2022 and 1.6 per cent in 2023. The outlooks for Germany and Italy – the largest and third largest eurozone economies are both highly dependent on Russian imports – are substantially lower than forecast in April. Next year, the German economy is expected to grow by only 0.8 per cent and the Italy’s by 0.7 per cent.However, this latest forecast does not take into account the increasingly likely scenario of a complete Russian gas shutoff. In this scenario, the IMF estimates that Germany and Italy would both face supply shortfalls of around 15 per cent of their normal consumption. The economic knock-on effects of this supply crunch would be significant. The IMF estimates that this would further slash another 1.3 percentage points from the EU’s 2023 growth forecast, resulting in “near-zero regional growth”.The UK would not be directly impacted by physical gas supply disruption, as it imports only around 4% of its gas from Russia. However, it is affected by rising prices in the global markets as demand in Europe increases, increasing consumer bills, and adding further upward pressure to inflation. The new Prime Minister will face increasing calls for further economic support to households, and the leadership candidates should prepare the public for further bad economic weather to come from the Continent.