Germany is facing several tough years due to a combination of transitioning to sustainable energy sources and the rising costs of energy, warned Germany’s Green Economic Affairs Minister Robert Habeck.
The federal minister, who has long called for a radical energy policy change, said that Germany faces “five tough years ahead” and revealed the country will have to borrow to support companies’ energy costs or lose their industry.
“Tough years of green industrial transition will put a burden on people,” Habeck said, noting that the IMF expects the German economy to shrink by 0.3 percent this year.
The German statistical office warned in May that the country was entering a recession, and some big companies are already thinking of moving out of Germany, fueling fears of a loss of industrial production.
German Economy and Climate Minister Robert Habeck arrives for the cabinet meeting of the German government at the chancellery in Berlin, Germany, Wednesday, June 7, 2023. (AP Photo/Markus Schreiber)
Habeck said the situation is due to high energy prices, which he says Germany is feeling more because it was previously used to cheap Russian gas.
High interest rates are also slowing down investment and global trade, which Germany, as an export-dependent country, is especially feeling, according to Habeck.
He said there was no reason to fear the situation, but he did not want to ignore the facts that people’s burdens would increase.
“We are facing a period of great transformation between now and 2030, as Germany moves from a traditional fossil energy-dependent industry to green energy such as hydrogen,” the Green politician explained.
Habeck suggested that energy-intensive companies competing internationally should receive public subsidies for their energy costs to meet the challenges of the transformation and to have enough money to invest.
However, this proposal is not supported by either the coalition partner FDP or the Social Democratic Chancellor Olaf Scholz.
Tyler Durden
Sun, 07/30/2023 – 07:00
