NYT: A Stress Test for E.U. Energy Supplies
Europe is conducting two stress tests. One is on its energy suppliers, to see how badly they would fare if flows of Russian were disrupted. The other is on eurozone banks to ensure they are strong enough to finance economic recovery.
It is hard to know which of the two stress tests is more important. But it is clear that an effective system of energy security requires many of the same elements as financial stability.
One is the need for credible stress tests. Europe flunked its original bank tests by modeling conditions that were not sufficiently stressful. The new test being conducted by the looks more credible.
The European Union is only now conducting its first gas test. Member states submitted their results last month to the , which is now reviewing them before coming up with recommendations next month. It should not pull its punches.