Kicking the canister down the road: EU energy policy

Hey, Ryan Reynolds here wishing you a very happy half off holiday because right now Mint Mobile is offering you the gift of 50% off unlimited. To be clear, that's half the price, not half the service. Mint is still premium unlimited wireless for a great price.

So that means a half day.

Yeah, give it a try@mintmobile.com Switch upfront payment of $45 for three month plan.

Equivalent to $15 per month required new customer offer for first three months only. Speed slow 135 gigabytes of network busy taxes and fees extra. See mintmobile.com.

Hello and welcome to the Intelligence from the Economist. In London, I'm Jason Palmer.

And in New York, I'm John Fassman. Every weekday we provide a fresh perspective on the events shaping your world.

In a lot of countries, the most widely prescribed treatment for depression are SSRIs, drugs that regulate the amount of serotonin in the brain. But a sweeping new review suggests there's actually little connection between serotonin levels and depression.

And in most places, one of the last things shopkeepers do before going home for the night is to lock up their goods. But in Dakar, vendors of valuable plants leave their wares unguarded. We explore why and what that says about trust is in Senegal's capital city. First up though, Today the amount of gas flowing from Russia to Europe through Nord Stream 1 will be cut by half to just 20% of the pipeline's capacity. The stated reason is maintenance issues. It comes after a 10 day switch off for planned maintenance of the pipeline. Many doubt those explanations, though, and believe the cuts are retaliation for sanctions imposed on Russia and for European support of Ukraine. Gas prices in Europe have jumped by 30% in the two days since Russia announced it would reduce supplies. That's a five month high. And yesterday, EU energy ministers met to hash out a plan to prepare for more cuts from Russia.

The energy ministers of the European Union met in Brussels to talk about cuts in gas consumption and they decided that all member states of the European Union should cut their gas consumption by 15% voluntarily. That could be turned into mandatory cuts if the situation gets really dire this winter.

Ludwig Sigler is the Economist, European Business editor.

Europe is really dependent on Russian gas, so the idea is to cut the dependency on Russian gas.

How does the EU plan to reduce its gas usage by 15%?

So these are voluntary cuts. If things get really bad this winter, then the commission can make these voluntary cuts mandatory. But there are lots of carve outs depending on whether countries are very dependent on Russian gas, whether they've already saved a lot, whether they're connected to the European gas pipeline network and all sorts of things, because they're all in different situation, then they don't want to all cut their consumption by 15%. A lot of countries like Spain or Portugal think that would be unfair.

So you mentioned Spain. What is the range of dependency on Russian energy? Which countries are most dependent and which are least dependent?

So you mentioned Spain, which is not very dependent on Russian gas. 10% on average in recent years, because they invested a lot in LNG liquefied natural gas terminals, so they can import gas from all over the world, and so they don't need to buy Russian gas. On the other end of the spectrum there is Germany. And when the war in Ukraine started, Germany imported 55% of all its gas it consumed in industry and households from Russia. That's down to 35%. But still it's a big number. And Germany can't easily do without Russian gas. And that's the issue here, is that Germany led a policy saying, we need Russian gas. It's good for our industry. Cheap Russian gas helps our industry to be competitive. Also, it solved a number of political problems in Germany. It allowed Germany to close down its coal electricity plants, also to phase out its nuclear plants. So Germany is the odd one out here. And if the European Union says all the member states have to cut gas consumption by 15%, it's basically to bail out Germany.

And so if Russia did decide to instigate a real gas crisis in Europe, how would Germany and other countries cope?

Germany has already thought about how to ration gas. So if this November there's really an emergency, the Federal Network Agency will start rationing gas for industry. And I think that's going to be a holy mess. There are many countries in Central Europe, like Czech Republic, which even rely more on Russian gas than Germany. I mean, there's Italy. Italy uses a lot of gas to produce electricity. So that's a problem if Russian gas goes away. And of course, there's Austria Also, I think 90% of all gas comes from Russia.

So can EU countries that are less dependent on Russian gas help ones that are more dependent, like Germany, Italy or Austria, by supplying gas to them?

Yeah, that's supposed to happen. That's why they have this flat rate, 15% cut. There's also kind of supposed to be agreements between countries how they could show solidarity with each other by helping each other out. If one country really needs gas, the other country has a surplus, it could pump this gas over. It remains to be seen whether that solidarity holds. I mean, in principle it should. It's a pretty obvious thing that Germany should allow gas to flow to the Czech Republic. If the Czech Republic doesn't have enough gas to heat its homes, but still kind of, there's this possibility that solidarity within Europe over gas will break down.

Do you think this 15% reduction will be enough to counter Russia's threat?

It's the first step. I mean, these numbers are always a bit arbitrary. There's experts saying you need a 20% cut, otherwise it's not going to work. It all depends on how mild or how hard the winter is this year. If it's a mild winter, the European Union may just scrape by. If it gets very cold, then it's going to be a problem and they have to cut more. And then also it's going to show that this deal, this compromise, even though it solved the political problems right now, probably won't be enough to solve the situation, then the European Union, the Commission, has to make these cuts mandatory. And then I think there will be a real gas crisis in Europe.

And so do you think Europe would be able to come together to deal with something like that? There seem to be some outstanding tensions, especially between, say, Germany and Spain.

You have to remember that during the euro crisis in the early 2010s, Germany basically told southern European countries that it won't bail them out, at least not fully. It basically told Spain, I mean, you've made a lot of debts, you live beyond your means, deal with it, solve your problems, but we're not going to pay off your debts. And of course, the situation now is a bit reversed, is that Germany has egotistically bet on cheap Russian gas, even though the European Union, the Commission, other member states always told Germany, don't do that, do your homework, don't live beyond your means energetically in that sense. And now I think it's quite normal that countries like Spain say, why should we bail out Germany? Why should we pay off Germany's gas debt?

So do you see Europe heading towards a crisis this winter?

I think yes, you may have a crisis this winter, but I don't think things will completely break down. I mean, there may be many headlines, more emergency meetings, but in the end, the European Union tends to kind of find some kind of compromise. Question, of course, will be whether that compromise solves the problems. It really depends how bad the winter will be. I mean, if Bush comes to shove, if it's really bad winter, perhaps even the European skills in finding a compromise among themselves is not enough.

All right, Ludvik, thanks so much for joining us today.

Thanks, John.

Back in the time of Hippocrates, it was called melancholia, from the Greek for black bile and treated with bloodletting. The name stuck, and in the Middle Ages, it was ascribed, like so many things, to witches and possessions. What's now called depression has been addressed with a staggering range of therapies since then, from Sigmund Freud's psychoanalysis to sitting on spinning stools to jiggle the brain back in order. All these treatments seemed misguided and anachronistic by the time modern pharmaceutical approaches came into fashion in the 1980s. One rose far and away above the rest, selective serotonin reuptake inhibitors, or SSRIs, the most famous of which was Prozac. But a close look at existing research is starting to make SSRIs look about as helpful as spinning stools.

It's widely believed that depression results from some sort of chemical imbalance in the brain. And that's because for decades, doctors and scientists believed that antidepressants called selective serotonin reuptake inhibitors alleviated depression by boosting the level of serotonin in the brain. And serotonin is a chemical that carries signals between neurons.

Slaviya Chankova is the Economist's healthcare correspondent.

So that supposition was based on the hypothesis that it is lack of serotonin which causes depression. But a growing number of studies have now shown that this, in fact, is not true.

So let's wind back a bit. Why is it that serotonin was fingered in the first place as the sort of root cause of depression?

Well, the serotonin hypothesis goes back about 50 years at least. And the theory existed largely because some early antidepressants seem to work, at least in some people. And those drugs actually were targeting the serotonin recept receptors in the brain by which they leave more serotonin to go between nearby neurons. And that's because neurons reabsorb serotonin after it carries a message to them. So when the drugs block this mechanism, there's more serotonin left. Now, scientists saw the effect of the drugs on depression and took that to mean that the biochemical causation of depression was actually the lack of serotonin. But now that idea is on very shaky ground.

How do you mean?

Well, a growing number of studies over time have shown that this link doesn't really exist. And this conclusion was really hammered home by an umbrella review of existing scientific studies that was just published in the journal Molecular Psychiatry. And this review, which was led by Joanna Moncrie from University College London, looked at several different strands of research that have examine the link between serotonin and depression. So one strand of research looks at levels of serotonin and its breakdown products in blood and in spinal cord fluid. And these are taken as proxies for the amount that could be present in the brain, because for obvious reasons, you can't measure it directly in the brains of living people. Now, work in that strand of research has shown that there is no difference between serotonin in people who are clinically depressed and those who are healthy. Another body of work examines the receptor proteins which respond to serotonin and the transporters through which it is reabsorbed by the neurons. And this trend of research occasionally found indications of higher serotonin activity in people with depression, which is the opposite of what you would expect. And the researchers reckon that this may actually be the result of antidepressant use, because many of the participants with depression are already using the drugs, and as a result, they have higher serotonin activity than people without depression. And that, again, casts doubt on the purported link between serotonin and depression.

So, essentially, the real basics of the assumption here about levels of serotonin and degree of reuptake and what have you, that that link seems to be broken here in these two strands.

Yes, that appears to be the case very, very clearly. And. And they looked at other types of research as well. They also looked at a popular strand of inquiry by scientists which take advantage of the fact that serotonin is made from tryptophan, which is a substance that the body cannot make itself. So you must get tryptophan from food in order to make serotonin. And in those experiments, participants, serotonin levels were lowered artificially by depriving them of tryptophan. And again, the review found that lowering serotonin in this way did not produce depression in hundreds of healthy volunteers. And lastly, they also looked at big genetic analysis where they found no difference between the genes that regulate serotonin transporters in those with depression and those without depression. So they seem to have looked at all sorts of possible ways that the link could have been proven, and they found no evidence that there was a link.

But these SSRIs are drugs that have been prescribed to millions and millions of people, the accepted therapy in a lot of cases, and seemingly an effective one in a lot of cases.

Yes, that's right. They do seem to work in some people, but definitely not in all people, and nobody knows why. Nobody can predict who is going to benefit and who will not. And what is clear is that the popular hypothesis of what they maybe doing to the brain is actually now proven not to be true.

So if that link seems so conclusively broken, then what does that mean about prescribing SSRIs to people with depression?

Well, in the first place, it means just being a little more judicious about prescribing them. And when informing patients about their options, definitely not to stress that their depression is entirely caused by some sort of chemical imbalance in their serotonin. And drugs are just gonna fix this miraculously. And it's worth pointing out that these drugs have lots of pretty serious side effects, such as loss of libido or inability to orgasm, which means, you know, they definitely affect you very strongly in some ways. But I guess what's so important about this study is just to highlight the fact that depression is such a multifaceted condition. It's not just entirely a chemical problem in the brain, but it's a combination of events, how people react emotionally to life. So some bodies, such as the National Institute of Healthcare Excellence in Britain, which guides the National Health Service here, do not recommend antidepressants as the first line of treatments, at least for milder cases of depression. They encourage doctors to talk to patients to try to work out what might be causing their depression, literally ask them that question and then trying to work out ways to help them without drugs or some sort of talk therapy or teaching them some coping skills to deal with whatever it is in their life that is causing them to get depressed. And drugs are part of the treatment. You know, they could be offered to patients, but they're no longer recommended as the first line of treatment, at least for milder cases of depression. So prescribing them more sparingly is definitely something that doctors must keep in mind.

Thanks very much for joining us, Liva.

Thank you for having me, Jason.

So alongside the kind of busy roads and dusty sidewalks of Jaka, the capital of Senegal, there are really dozens of little oases. And these are garden nurseries. They're full of kind of beautiful bougainvilleas, potted up palm trees, and they add a sort of splash of green and color and help with the heat as well.

Kinley Salmon is an Africa correspondent for the Economist.

In some places, these cluster together and as you're driving through, you have this sort of sensation as if you're zooming through a botanic garden, traveling past these nurseries I was sort of suddenly struck that it seems that at night, all these traders who are there sometimes selling at night, they just leave their leafy assets behind and head home. Which to me seemed a surprising thing to do given that their plants and trees presumably are worth quite a bit.

And tell me about that, are they actually quite valuable?

Yeah, indeed so. Some varieties can be worth 50,000 CFR. That's about US$75. It's even more odd because sometimes there's not even anyone there watching the plants in the day either. I went by one area full of nurseries on a public holiday and only about three of the 30 plant nurseries had anyone present there at all. And one of them was asleep when he perhaps should have been watching. But even on normal weekdays, there are many owners just leave signs with a phone number to call if you're interested to buy a plant, rather than spending their day watching over their plants.

Why do you think these plant sellers are so confident that their plants won't be stolen?

It may just be that they believe people here are pretty trustworthy. Pollsters from Afrobarometer find that the Senegalese are the fifth most trusting people in Africa. One in five of them think that most people can be trusted. I spoke to one plant seller, Adama, who runs a roadside nursery. He said he's only had a few thefts in 10 years and said that if you're friendly to everyone, then when you're away, other people keep an eye out for you.

Even at night, when it comes to plants, it just seems to me, and maybe this is my having lived too long in relatively high crime North American cities, it just doesn't seem like a great business practice.

Yeah, I mean, it seems to work for them quite well and I guess for them gods also would be a cost. But they may be getting a little help from other things too. I mean, ignorance of the value of these plants may play a role. I was told lots of people who walk by and who perhaps might opportunistically nab a plant just don't know what they're really worth. And the only people that are a real threat are other gardeners. And the folks I spoke with said they already know and work with them, so they're not the most likely thieves. And then some plants, of course, are a bit harder to steal. They're in big pots or things like cacti can rather spike the enthusiasm of thieves who might be scrabbling for them in the dark.

So do you see this practice as sustainable, do you think the presence of guards and locks are inevitable in the course of time.

Well, it'd be nice to think that it is sustainable. It's hard to know for sure, and there were some signs that not everyone's quite as confident. One owner of a small nursery in a more upmarket part of town persuaded some of his unemployed friends to keep watch at night. He did, though, tell me that he put his trust in God to protect his plants and said to me, look, at least I have mystic security. And for now, that approach seems to be working.

All right, Kinley, thanks so much for joining us today.

Thank you.

That's all for this episode of the Intelligence. Let us know what you think of the show. You can get in touch@podcastseconomist.com and you.

Can subscribe to the economist@economist.com intelligenceoffer. The link is in the show Notes. We'll see you back here tomorrow.