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EconomyRussia winning sanctions-versus-gas war?

Russia winning sanctions-versus-gas war?

Russia seems to be winning the tit-for-tat tussle by choking its gas supplies to Europe, the energy woes of which keep getting worse. With winter coming, Russia cut off natural gas exports. 

European Union leaders are trying to steer the continent away from a financial meltdown, proposing emergency interventions including skimming from energy companies’ profits, “incentivising” power saving to price caps on all gas — and not just Russia’s. 

Still, a number of green hydrogen projects, a potential substitute for natural gas, are on hold. In the UK, Prime Minister Liz Truss announced a cap on household energy bills and a fund to help power companies access extra liquidity. 

China, for its part, may add new coal-fired power plants after a spate of power crunches. 

In the US, California is barely avoiding rolling power outages, underscoring how grids have become vulnerable to extreme as they transition from fossil fuels to renewable energy. 

Meanwhile, the European Central Bank hiked interest rates by a historic amount to tamp down inflation, though higher borrowing costs are unlikely to blunt energy prices. 

US Federal Reserve Chair Jerome Powell said the US central bank won’t flinch in its inflation battle, hardening expectations of a third straight jumbo rate hike. While the Fed is still hoping for a soft landing, two new papers argue that the policies could lead to more economic harm than is realized, both to US employment and developing nations. 

On the battlefront, Ukrainian forces are mounting a counteroffensive that’s pushed about 50 km into Russian-held territory near Kharkiv, the second largest city in Ukraine. repeated his contention that Russia will emerge stronger from his invasion, saying “we’ve lost nothing and won’t lose anything.” 

But time isn’t on Russia’s side. As long as Ukraine shows a will to fight, western aid likely won’t dry up — and Russians “should consider the very real possibility of defeat”.

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