Referring to the problems already faced by energy providers, Mr Habeck spoke of the risk of domino effects in energy markets if the natural gas crisis worsens.
The energy crisis poses a major challenge for Germany in the coming months, Economy Minister Robert Habeck warned, and spoke of the risk of further widening the gap between rich and poor. He even described as “overwhelming” the fear prevailing in the market and in society about the future.
The first two quarters went very well in many areas, Mr Habeck said speaking at a Social Democratic Party (SPD) Economic Forum event in Berlin, pointing to tourism, gastronomy and services where, after the pandemic, there were again positive growth rates. “The pandemic is behind us. The present is not so bad, but the fear of recession, the fear of the future, even the immediate future, is overwhelming,” the minister said.
Referring to the problems already faced by energy providers, Mr Habeck spoke of the risk of domino effects in energy markets if the natural gas crisis worsens. “We will not allow ourselves to have systemic effects on the German and European natural gas market, because then there will be domino effects and other sectors will be affected, or even the security of supply as a whole, from the bankruptcy of one company”, stressed the minister, referring to the discussions on the rescue of the company Uniper.
As he explained, the cabinet decided on changes to the legislation in order to support companies like Uniper. He also pointed out that the cause of the problems is the significant limitation of the amount of natural gas piped into the Nord Stream 1 pipeline from Russia. “The quantities of natural gas ordered from Russia with relatively cheap contracts sometimes do not reach us and the contracts are not serviced, as a result, in order to service the contracts of the providers with utilities and industry, it becomes necessary to supply of natural gas from other markets, at very high prices. “This is the problem. Companies can hold out for a while, but not indefinitely,” he stressed.
Regarding energy prices, the Minister of Economy assured that the government does not want to pass on the increases to consumers at the moment, as there is a serious risk of limiting purchasing power. “But these scenarios are not laws of nature,” said Robert Hambeck, however, clarifying that some problems can be addressed through regulations, provision of public money, social compensations and other measures. “The country has so far proven its value as a political system and as a society,” he noted.
“If the next two quarters could be similar to the first two quarters of the year, then this would be a social, political masterpiece, which is not really expected. But it is up to us to ensure that it does not go completely wrong under very difficult circumstances,” the minister concluded.
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