Why can Bulgaria and Poland resist Russia's gas supply?

Why can Bulgaria and Poland resist Russia's gas supply? ...

Alexander Mihailov, Universite of Reading, is well-known among others.

Gazprom, a Russian energy company, has completely shut off gas deliveries to Poland and Bulgaria. Both countries are apparently being punished for refusing to pay Russias for their gas in roubles.

Other EU nations have also refused to pay in Russian currency (doing so would boost the Russian economy), but so far only Bulgaria and Poland have had their supply cut.

Poland''s immediate response has been that without Russian gas, storage levels are rising, and demand is decreasing as the weather warms. Bulgaria meanwhile, accuses Gazprom of a serious breach of contract, and is in discussions with EU partners about maintaining supplies.

This will not be easy. While Bulgaria may gradually switch away from Russian gas and oil, a severe downturn will cause serious devastation. Alternative supplies from Azerbaijan will not be sufficient.

One strategy is to continue with the (currently abandoned) completion of Bulgaria''s second nuclear power facility near Belene on the southern banks of the Danube river. Along with Poland, Germany, and the rest of the European Union, Bulgaria will also strive to expand its dependence on Norway, the Middle East, and North Africa. There will also be calls across the EU to accelerate a switch to renewable energy sources such as solar and wind power.

All of these efforts will serious damage to Russia''s economy. Why is it shutting down the taps? Why is it aimed at these two countries, particularly?

On the flip side, we can make a decent assumption that the major goal is to create economic difficulties and political divisions in Poland and Bulgaria, and to challenge Ukrainian assistance. Vladimir Putin will no doubt enjoy presenting this as an opportunity to discuss both NATO and the EU.

Russia has also used its strength in trying to undermine the country''s economic and political independence. A pact between the Soviet Union and Nazi Germany in 1939 denied the existence of a Polish nation and aimed to share its land.

Russia has received its latest economic blow against Poland and Bulgaria as a result of international support. It is a blow that can be overcome.

Statista. Dependency

According to my own economic research into social learning, people, as well as business and wider societies, constantly adapt to changing situations.

Part of my research focused on developing an economic model that demonstrates how individuals respond to economic incentives and pressures, and how this is influenced by their historical experiences.

Evolutionary economics

I investigated the relationship between how economic incentives (such as perceived costs and benefits) and social preferences played a role in the rise and decline of communism. Simply, we found that for thousands of years, human societies have evolved economically by experimenting and learning about their environment. They have become adept at responding to it, sometimes gradually, sometimes abruptly.

The key message is that EU nations will eventually adapt to making a move away from a massive dependence on Russian energy. This will be costly in the short run, but viable and beneficial in the long run.

While energy problems will be avoided by Russia, which used gas as the President of the European Commission''s unjustified and unacceptable tool of extortion, then on the long term, everything can change with new suppliers and alternative sources.

Poland and Bulgaria are no longer obedient vassals of Russia. Despite their difficulties and division, they can rely on the economic help of the wealthy nations around them. Wars are eventually won by nations who can overcome hardships in an organized manner, and whose economies are no longer brought to a breaking point.

Human beings and most nations value freedom highly even if it comes with a high economic cost to pay. In the long run, EU and Nato''s democratic societies, for whom freedom is essential human value that must be protected, must stay unified and assist each other.

Alexander Mihailov, an Associate Professor in Economics, University of Reading

This article is republished from The Conversation under a Creative Commons license.

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