Status: 01/11/2022 08:52 a.m
Small and medium-sized businesses and the Association of Municipal Enterprises (VKU) are warning of the collapse of German municipal utilities. The state of emergency is affecting the energy supply of medium-sized companies more and more frequently.
Demands on politicians to support municipal utilities in the current energy crisis are increasing. In an open letter to Chancellor Olaf Scholz (SPD), the BVMW SME association and the Association of Municipal Enterprises (VKU) warn of a collapse of German municipal utilities. “We will only be able to maintain production and value creation if the state intervenes massively as a guarantor now,” the associations write in it. In view of the sharp rise in energy prices in the course of the Russian attack on Ukraine, the supply for medium-sized companies would otherwise be in danger. “That’s why there’s a lot of pressure to act.”
Because in many cases they are still tied to long-term energy supply contracts, but the purchase prices have skyrocketed, more and more municipal utilities are getting into liquidity problems. “The victims are medium-sized companies that are getting fewer and fewer offers for new energy supply contracts from their suppliers,” according to the associations. “Far too often at the moment it’s becoming impossible to get any delivery offers at all.”
Loans, guarantees and an insolvency moratorium are required
Both associations advocate a protective shield for municipal utilities. This would serve to ensure security of supply and thus help the entire economy, said VKU general manager Ingbert Liebing, whose association represents over 1500 municipal utilities and municipal companies. Specifically, the two associations are calling for more government loans and sureties or guarantees to hedge against the risk of default by trading partners. There should also be an insolvency moratorium for industry, commercial enterprises and energy companies.
The President of the German Association of Cities, Markus Lewe, also called for clear decisions before the federal-state talks on Wednesday. “We need clarity for the municipal utilities in the energy crisis,” said the CDU politician to the newspapers of the Bayern media group. “The federal government should pull itself together and, together with the federal states, secure municipal utilities that are threatened with bankruptcy with a rescue package.”