Germany faces steep recession if Russian oil and gas halted - banks

"A signal that is urgently needed," said Christian Sewing, the chief executive of Deutsche Bank.

 A model of the natural gas pipeline is placed on Russian Rouble banknote and a flag in this illustration taken, March 23, 2022. (photo credit: REUTERS/DADO RUVIC/ILLUSTRATION/FILE PHOTO)
A model of the natural gas pipeline is placed on Russian Rouble banknote and a flag in this illustration taken, March 23, 2022.
(photo credit: REUTERS/DADO RUVIC/ILLUSTRATION/FILE PHOTO)

Germany will face a steep recession if there is a stop to imports or delivery of Russian gas and oil, a top German bank lobby warned on Monday.

Europe's largest economy is heavily dependent upon Russia for energy, and nations' banks echoed concerns over possible energy disruption expressed by big names in the industry in recent days. 

Christian Sewing, the chief executive of Deutsche Bank, said in his role as president of Germany's BDB bank lobby that banks expected sharply slower growth this year of around 2% due to the war in Ukraine.

"The situation would be even worse if imports or supplies of Russian oil and natural gas were to be halted. A significant recession in Germany would then be virtually unavoidable," Sewing told journalists.

"The question of government aid measures for companies and sectors would then become even more urgent," he said.

 A 3D printed Google logo is placed in front of a display of the Deutsche bank logo in this illustration picture taken July 7, 2020. (credit: REUTERS/DADO RUVIC/ILLUSTRATION)
A 3D printed Google logo is placed in front of a display of the Deutsche bank logo in this illustration picture taken July 7, 2020. (credit: REUTERS/DADO RUVIC/ILLUSTRATION)

Sewing once again called on the European Central Bank to act to fend off inflation.

He said the ECB should end its net asset purchases soon and should send a signal with interest rates.

"A signal that is urgently needed," he said.