While the two countries decided to increase their military spending for fear of any possible Russian move, Ottawa made plans to increase its oil exports, and Berlin plans to store sufficient quantities of gas before next winter.
Canada is entrenched economically and militarily
The Canadian government decided to increase its military spending by $6.4 billion, for a period of 5 years, against the backdrop of the Ukraine war.
Canadian Finance Minister Chrystia Freeland says that “we will spend more on defense than we expected before the Russian military operation in Ukraine,” according to Agence France-Presse.
And she added, “This percentage of defense spending will not allow Ottawa to reach the goal that NATO wants, which is to spend 2% of GDP on armaments for each member country.”
According to the Canadian newspaper, “Toronto Star”, “Canada’s air defense systems are old, and are not able to confront the new Russian missiles,” noting that “this will exceed $20 billion.”
Experts say the system of ground-based radar stations, designed to detect Russian bombers approaching Canadian soil, must be completely revamped.
In this regard, James Ferguson, head of the Center for Defense Research at the Canadian University of Manitoba, says that “these radars are not only old, but also unable to bypass new threats over the past ten years.”
“We really need to think about defense in North America differently, and the Russian operation brought that to light, and that threat was the most acute in the short term,” he says.
Oil production and food prices
Economically, Canada plans to increase oil and gas exports by 300,000 barrels per day by the end of this year in the wake of the Ukraine crisis.
The Minister of Natural Resources, Jonathan Wilkinson, says that his country is considering replacing liquefied natural gas from Canada with Russian gas, following European requests, according to “Reuters”.
Canada – the fourth largest producer of crude oil in the world – currently exports about 4 million barrels per day of oil to the United States, and a small part of it is re-exported abroad.
As for Environment Minister Stephen Gilbo, he says that the oil project called “Bay de Nord” will allow the extraction of 300 million barrels within 30 years from a field off the coast of the Canadian province of Newfoundland on the Atlantic Ocean.
Canada’s inflation rate hit a multi-decade high of 5.7 percent last month, as did the price of gasoline, groceries and housing, according to Statistics Canada.
As for “Bloomberg”, it says that the geopolitical conflict due to the Ukrainian crisis has led to uncertainty in global oil supplies, which has increased pressure on prices.
“The key is to accelerate the transition away from fossil fuels by investing in renewable energy and efficiency,” says Keith Stewart, senior energy analyst at Peace Canada.
Germany’s decisions
As for Germany, on the military front, the Parliament’s Defense Committee approved a deal with armed drones, which is a precedent in the country’s history.
According to Agence France-Presse, 140 Israeli-made Heron TP drones will be purchased, with a total value of 152.6 million euros, and the equipment is expected to be delivered within two years.
The drones will be used to “contribute to the protection of military personnel working abroad,” according to the document prepared by the German Defense Ministry.
After years of lack of investment in the army, Germany witnessed a historical turning point at the end of last February, due to the war in Ukraine, which represented a military turning point in the country.
As a result, German Chancellor Olaf Scholz decided to allocate 100 billion euros to modernize the army, and spend at least 2% of GDP each year in the field of security and defense.
Berlin is also considering acquiring an Israeli “Iron Dome” air defense system.
Political analyst Abdel Masih al-Shami says that the increase in the level of armaments and military spending for Germany is primarily an American demand, and that German spending will be within the framework of NATO.
He adds to “Sky News Arabia” that the increase in military spending will add additional burdens to the German government, after the “Corona” epidemic and the decline in economic growth, pointing out that “there is fear in the German street that there are no alternatives to Russian energy so far.”
Economically, the German government announced its intention to act if the companies operating natural gas reservoirs did not succeed in storing sufficient quantities of it before the peak season of consumption next winter.
Berlin aims to reduce the share of Russian gas in its total fuel imports to 10% by mid-2024, compared to about 40% of imports currently.
According to the new rules approved by the German Parliament, and which will come into effect next May, warehouse operators will have to ensure that they are filled to 90% of their capacity by the first of November of each year.
According to Robert Habeck, German Economy Minister, the new law is part of the government’s moves to secure energy supplies in the wake of the current war.
According to the new law, natural gas deposits in Germany must be filled to 80% of their capacity by the first of October, and allow withdrawals from them to reduce the quantity to 40% by the first of February of each year, according to Bloomberg.
Warehouse users must use the full capacity they reserve, otherwise the reservation will be canceled and this capacity withdrawn from them, in accordance with this law.
Experts estimate that Germany’s economic losses may reach about 3% of its annual gross domestic product.
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