Comment on the industrial electricity price: It’s about the substance

The economy is still struggling with the consequences of the energy crisis. Many companies are under pressure. Economics Minister Habeck has now presented a concept and it was high time for it.

“Made in Germany”: This is more than just a designation of origin. The brand stands for the strength of German industry. And how much our country’s prosperity is derived from industries such as mechanical engineering.

But since the war-related energy crisis, manufacturing companies have been under pressure – especially in sectors such as the chemical industry or metal production. Anyone who simply leaves things to the market in this situation risks loss of prosperity. That’s why it’s good that the Federal Minister of Economics now wants to take countermeasures.

The numbers speak for themselves: Industrial production as a whole is weakening – and in the energy-intensive sectors it has collapsed since the start of the Russian war of aggression in February last year. The Federal Statistical Office recorded a decline of almost 17 percent for the period up to July of this year.

The money would be well invested

In addition, industrial companies in Germany have to pay significantly more for electricity on average than competing companies in the USA or China. The price level is also lower in France, as a current study commissioned by the Bavarian Business Association shows. A decisive competitive disadvantage for affected companies in this country.

As an antidote, Federal Minister of Economics Robert Habeck suggests subsidizing the price of electricity for energy-intensive industrial companies for a while. That would probably cost many billions. But the money would be well spent. Otherwise, in the long term, entire industries could disappear from Germany – from steel production to cement production. In such a case, experts warn of a domino effect: other industries would gradually also be threatened.

There is a lot at stake

Critics of subsidized electricity prices argue that this supports companies that are actually not competitive. But this falls short for two reasons: Firstly, the state should only keep the price artificially low until there is enough cheap green electricity for the economy. Secondly, the industry offers millions of people jobs, mostly well paid and covered by collective agreements. So it’s about the kind of jobs from which employees can make a good living.

Admittedly, a subsidized electricity price alone will not save German industry. Less bureaucracy, more investments in rails, roads and bridges, new trade agreements – all of that is also part of it. But an industrial electricity price would be an important first step, even if the Chancellor and the FDP are still skeptical. You should give it a try because there is a lot at stake.