The EU would have a number of options to help compensate if Russian gas supplies were to be turned off, but in practice we suspect that some degree of power rationing would be needed. Past episodes of energy rationing were not as damaging as one might expect, and a hypothetical 10% reduction in gas use in Europe would probably reduce EU GDP by less than 1%.
In view of the wider interest, we are also sending this European Economics Update to clients of our Nordic & Swiss and Emerging Europe Services.
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