The German Minister of Economy, Robert Habeck, affirmed this Thursday that only the increase in the price of gas could cost Germany 2% of GDP and advocated a tailored investment program to protect the “economic substance” of the country.
In 2022, the German economy will lose €60 billion invested in energy purchases from other sources following the Russian gas supply cutoff and next year the figure could rise to €100 billion, Habeck told a congress of the Federation of the German Industry (BDI).
This implies that between this year and the next two points of GDP will be lost, the lack of which will be noted “in all areas”, while inflation will continue to be high in 2023, although “with a good political touch” it will fall at the end of this year , according to the green minister.
But unlike inflation in the United States, where fiscal restraint is part of the solution, in the case of Germany it is an “exogenous shock,” said Habeck, who also holds the rank of vice chancellor.
For this reason, additional support measures are needed to protect the economy with fiscal policy instruments, since those adopted so far by the coalition Executive of Social Democrats, Greens and Liberals are insufficient.
“Now it’s time to defend the economic substance of our country,” he said, adding that this purpose should not fail “due to lack of money,” since this would be “an erroneous political decision.”
On the contrary, “tailor-made” instruments are needed to strengthen companies “without aggravating the crisis,” said Habeck, who put forward several proposals in this regard that, according to what he said, are still being debated among cabinet members.
According to the minister, it is not about “maintaining the status quo” but about promoting an energy transition that responds both to current needs and to the objective of fighting climate change.
He warned, however, that this transformation will also mean that certain products will no longer be produced in Germany and that the business model of certain companies that “have built their business on the supply of cheap Russian gas” cannot be guaranteed.
The minister also made reference to the government’s plans to impose a cap on the price of gas, which he said he hoped could go beyond the ideas put forward at a European level to limit the windfall profits of energy companies.
“The very announcement that we will act on this has led to a drop in prices,” he said, although he clarified that these are not yet “where they should be.”
Asked about the information published today by the weekly “Der Spiegel”, according to which the Government is planning to nationalize the German subsidiary of Gazprom Germania, Habeck neither confirmed nor denied the news.
“All companies that buy and sell gas have a problem due to the absence of Russian quantities. At a certain point they reach the limit, ”he said, noting that the“ steps ”to be undertaken with respect to the subsidiary of the Russian gas giant will be announced“ in time ”.
Gazprom Germania (now Securing Energy For Europe) was taken over by the German government in April and received a loan of more than €9 billion to protect it from insolvency, although according to German media this amount turned out to be insufficient.
This Wednesday, the Executive announced the nationalization of the main importer of gas from Germany, Uniper, of which the Finnish Fortum owned half to date, after the entry of the German State to rescue the company.