Status: 09/27/2022 04:59 am
Economics Minister Habeck fears for the future viability of the German economy. High energy prices could cause lasting damage, he warned. Extensive aid is needed to cushion the crisis.
Economics Minister Robert Habeck has warned of long-term damage to the German economy due to the energy price crisis. He spoke out in favor of extensive financial aid from the federal government.
“Sometimes it’s just a smoldering fire, sometimes the hut is already burning. In any case, the future viability of our economy is at risk, there is a risk of permanent damage,” Habeck told the dpa news agency.
“We mustn’t waste any time”
“We now have to muster all the financial strength to bring the good substance of our economy through the crisis, to secure jobs and to protect the investment and future viability of our economy.” As Economics Minister, he is doing all he can to achieve this, according to Habeck.
“We are working at full speed in the Federal Ministry of Economics to set up the aid programs and are discussing the important question of financing in the government. We must not waste any time here.”
Financing still open
Chancellor Olaf Scholz will meet with the heads of government of the federal states on Wednesday. Habeck had already announced that he wanted to expand government aid programs for companies because of the sharp rise in energy prices. But the question of financing remains open.
Habeck had brought a multi-billion dollar special fund into play. Politicians had decided on a special pot worth 100 billion euros for the Bundeswehr. This means new debt. It is controversial in the coalition whether the debt brake anchored in the Basic Law will be observed again in the coming year, Finance Minister Christian Lindner insists.
The debt brake had been suspended in recent years due to the corona pandemic. It only allows the federal government to take out new loans to a limited extent. If the controversial gas levy is overturned, it is unclear where the money will come from to support struggling gas importers. But they can hope for some relief on the markets.
Well-stocked natural gas storage tanks
Because the fall in gas prices continued on Monday. European natural gas continued to become significantly cheaper, continuing the trend of the past few days. In the morning, the price of the TTF futures contract for Dutch natural gas fell at times by more than eight percent to less than 170 euros per megawatt hour. On Friday it was still around $188. The TTF contract serves as a guideline for the European price level. In August, the price jumped to a record high of more than 300 euros per megawatt hour.
According to experts, natural gas buyers can hope for a continuation of this trend in the coming months. The reason for the fall in prices is, among other things, well-stocked storage facilities in Europe. The storage level in Germany was recently over 90 percent.
In addition, there are record-high imports of liquefied natural gas (LNG) from the United States and falling demand due to the persistently high price level, explain the analysts at EnergyScan, the data provider for the utility Engie. As a result, fears of supply bottlenecks in winter have diminished somewhat.