– **Dependence on Russian gas, oil hamstrings Berlin’s options**
– **Industrial base struggling with sky-rocketing energy costs**
Germany’s industrial base, just emerging from pandemic and unprecedented supply-chain challenges, is taking another beating with Russia’s war on Ukraine hitting its powerhouse car, chemical and precision-machinery manufacturers.
As the conflict pushes energy costs to new heights and a wave of inflation builds, scores of companies including BMW AG, BASF SE and ThyssenKrupp AG have warned their earnings will slip while others declined even to offer a prediction. Economists have slashed growth forecasts.
“If the war drags on, it would seriously threaten a world order that has brought freedom and prosperity to many parts of the world over the past decades,” Herbert Diess, Volkswagen AG’s chief executive officer, said this month at the company’s annual earnings press conference. “Europe would suffer the most in such a scenario.”
In Berlin, the government has acknowledged the depth of the predicament, but its options — both economic and political — are limited by decades of energy policy that have left Germany among Europe’s most heavily dependent nations on Russian gas and oil. Even before the invasion, Germany’s energy-intensive industry base faced momentous shifts with the planned exit from nuclear and coal alongside Europe’s highest electricity costs.
Economy Minister Robert Habeck has set up a task force to gather data from industry on gas and electricity use and prices, production plans, supply bottlenecks and reliance on Russian energy.
On Friday, Habeck, who’s been moving to lock in other energy sources, said Germany wants to end Russian gas imports by mid-2024. Habeck led a group of executives from firms including BASF, Deutsche Bank AG, Commerzbank AG and RWE AG to Qatar and UAE last week to secure shipments of liquefied natural gas.
But the moves can’t provide the immediate relief firms are seeking, and signs are building that the war could cause lasting economic pain to Germany’s export-driven manufacturers riding high for years on demand from China and efficient supply chains. Finance Minister Christian Lindner has warned Germany is in danger of stagflation, when high inflation persists alongside an economic slowdown.
Time for a paradigm shift: turn away from green policies at all costs, back to nuclear and coal.
Does it hurt, Germany, having to give up environmental sanctimonious virginity !?
This type of reporting doesn’t scare me anymore. I’ve (partly) watched Biden’s speech in Poland and I feel that we really have reached a turning point where we’ll have to make some sacrifices.
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– **Dependence on Russian gas, oil hamstrings Berlin’s options**
– **Industrial base struggling with sky-rocketing energy costs**
Germany’s industrial base, just emerging from pandemic and unprecedented supply-chain challenges, is taking another beating with Russia’s war on Ukraine hitting its powerhouse car, chemical and precision-machinery manufacturers.
As the conflict pushes energy costs to new heights and a wave of inflation builds, scores of companies including BMW AG, BASF SE and ThyssenKrupp AG have warned their earnings will slip while others declined even to offer a prediction. Economists have slashed growth forecasts.
“If the war drags on, it would seriously threaten a world order that has brought freedom and prosperity to many parts of the world over the past decades,” Herbert Diess, Volkswagen AG’s chief executive officer, said this month at the company’s annual earnings press conference. “Europe would suffer the most in such a scenario.”
In Berlin, the government has acknowledged the depth of the predicament, but its options — both economic and political — are limited by decades of energy policy that have left Germany among Europe’s most heavily dependent nations on Russian gas and oil. Even before the invasion, Germany’s energy-intensive industry base faced momentous shifts with the planned exit from nuclear and coal alongside Europe’s highest electricity costs.
Economy Minister Robert Habeck has set up a task force to gather data from industry on gas and electricity use and prices, production plans, supply bottlenecks and reliance on Russian energy.
On Friday, Habeck, who’s been moving to lock in other energy sources, said Germany wants to end Russian gas imports by mid-2024. Habeck led a group of executives from firms including BASF, Deutsche Bank AG, Commerzbank AG and RWE AG to Qatar and UAE last week to secure shipments of liquefied natural gas.
But the moves can’t provide the immediate relief firms are seeking, and signs are building that the war could cause lasting economic pain to Germany’s export-driven manufacturers riding high for years on demand from China and efficient supply chains. Finance Minister Christian Lindner has warned Germany is in danger of stagflation, when high inflation persists alongside an economic slowdown.
Time for a paradigm shift: turn away from green policies at all costs, back to nuclear and coal.
Does it hurt, Germany, having to give up environmental sanctimonious virginity !?
This type of reporting doesn’t scare me anymore. I’ve (partly) watched Biden’s speech in Poland and I feel that we really have reached a turning point where we’ll have to make some sacrifices.