Inflation and energy prices: crisis alarm in Germany: how bad is it really?

The gas situation is coming to a head. Federal Finance Minister Lindner agrees to hard times, warns of “desperate” tenants.

Gas is still flowing from Russia to Germany. But the signs have changed significantly since then Gazprom cut its shipments by 60 percent last week. There is a mood of crisis within the federal government.

Also read: What the federal government now wants to do against inflation

Talks about an “economic attack on us”. Federal Minister of Economics Robert Habeck (Greens). The Federal Minister of Finance was also clear Christian Lindner: “It’s about three to five years of scarcity.” At the Real Estate Industry Day in Berlin, Lindner was even clearer: “I think we’re already in an economic crisis due to inflation.”

For a long time you thought you were in Germany on the safe side that Putin does not turn off the gas tap – after all, according to a study by the Finnish company, German companies transferred money Center for Research on Energy and Clean Air (Crea) In the first 100 days of the war, around 12.1 billion euros went to Russia for gas, oil and coal, thus making the war chest ring.

Also read:What German companies are now afraid of

Instead, there were repeated calls for Germany to actively scale back its imports. But now Russia is getting serious – and in Germany there is growing concern about the consequences. Answers to the most important questions:

Why is Russia supplying less gas?

Officially, Gazprom justifies the throttling with the fact that the German company Siemens Energy cannot deliver a turbine that is in Canada for maintenance. Economics Minister Habeck thinks that is an excuse. Putin the Green politician suspects that it is about increasing the pressure and dividing Europe. Finance Minister Lindner does not see Putin as having the upper hand: “Putin does not have us in his hands.” Germany has alternatives to make itself independent of Russian gas.

Can Germany cope with a gas embargo?

“It depends when delivery stop occurs, how long it lasts and how well we are prepared,” said Veronika Grimm from the German Council of Economic Experts, the so-called economic experts, to our editors. In an extreme scenario, it could gross domestic product according to Grimm by up to twelve percentage points. Such a severe recession would probably result in a sharp increase in the number of company bankruptcies and unemployment.

But even the calculations without extreme assumptions look bleak: Depending on the scenario, the range is still one GDP decline from 0.5 to 6 percent. How bad it really gets depends on which measures are taken to save energy.

How is the federal government reacting?

First of all, the next crisis level could be declared in the gas emergency plan: the alarm level. Should she come, gas for company and customers will be even more expensive than they already are. Because then the suppliers could pass on additional costs directly to the customers if they have to buy additional gas.

Also read: Ukraine war – how Germany can get out of the gas crisis

Should the third stage, the so-called emergency stage, occur, the state could use the Federal Network Agency decide who gets gas and who doesn’t. Consumers are particularly protected.

goal of federal government is that the gas storage tanks will be completely full by autumn – then, depending on the temperatures, the German economy could still get through the winter before new ship terminals for the landing of liquid gas tankers are to be completed next year in order to offer an alternative to Russian pipeline gas create. In order to continue to fill the memory with the now throttled delivery, Habeck calls for energy saving.

How should energy be saved?

So far, the federal government has appealed to the voluntary nature of the consumers: changing the shower head, putting a lid on the pot when cooking, regularly defrosting the freezer compartment or turning down the heating. However, that will not be enough if no more gas flows to Germany. A reduced one is already being discussed minimum temperature in apartments or the closing of swimming pools and saunas should there be a stop.

Economics Veronika Grimm, on the other hand, relies on state incentives to save gas: “Because the sooner it becomes clear that saving is worthwhile for the individual, the better households will prepare themselves and increase their individual savings potential,” said the professor from the University of Erlangen-Nuremberg.

Can the economy save gas?

Business representatives emphasize that they are saving gas anyway – in their own business interest given the high prices. the federal government but sees even more potential: An auction model should make it palatable for companies to reduce their gas consumption from the summer. The companies would then receive money for gas that the companies do not burn and instead make available for the storage facilities. The auction model is scheduled to start in the summer.

Will the nuclear power plants stay connected to the grid longer?

At Industry Day, CDU leader Friedrich Merz campaigned for the three nuclear power plants still on the grid to run longer. CSU boss Markus Söder had already brought an extension of the term until 2025 into play.

On the other hand, the federal government came to the conclusion in an examination that continued operation would not bring any short-term relief. Fuel rods would have to be reordered, and security personnel would have to be trained. In addition, the piles would have to be extensively maintained and would fail for half a year, said Habeck. If this maintenance were left out, the safety risk would increase – in a phase in which the danger was imminent cyber attacks be high anyway.

Do social tensions threaten in the event of a gas stop?

More than one in seven people in Germany can no longer cover the monthly costs with their income; at net income almost one in four for less than 2,500 euros. That comes from surveys. Some of them are already a few weeks old – and the prices for energy and food have continued to rise sharply since then. Families in particular are affected.

To relieve had Labor Minister Hubertus Heil already proposed a “climate money” for low-income people. Now he announces that he will discuss further relief for “lower and normal incomes”. And Finance Minister Lindner also says: “We have to relieve the burden. When the ancillary cost bill comes, many tenants will be in despair.”

Warning with a view to the worsening of the situation in the autumn social associations and trade unions already now – and are demanding faster help from politicians. The president of the social association VdK, Verena Bentele, campaigns for a monthly subsidy for housing allowances for heating and energy costs.

“Families with low wages and older people with small pensions, and all households with low incomes in general, must be relieved of the gas price increases in a targeted and permanent manner,” said Bentele our editorial team. “The housing benefit offers a good way here, but urgently needs to be supplemented by a monthly heating cost and energy cost component,” emphasized Bentele.

Abusing it now extremists the misery of the people, to stir up feelings against the “system” and the state, to stir up the people. Security agencies are concerned that radicals are successfully docking in non-extreme, middle-class milieus with the debate over rising costs.

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