The President of the Association of German Chambers of Industry and Commerce (DIHK), Peter Adrian, has warned that Germany faces a “loss of prosperity on a hitherto unimaginable scale” due to skyrocketing energy prices, which have increased tenfold since the start of the war in Ukraine.
“The crisis is here and is getting worse at an enormous rate”, he said in a conversation with the Neue Osnabrücker Zeitung.
The explosion in energy prices has been “downright dramatic for many companies,” forcing many to close down.
“Business closures in the areas of trade and services due to unaffordable energy prices are already a bitter reality,” said the DIHK president.
”Every month that prices remain high, more companies will close.”
German sanctions on Russian gas and oil imports have led to an energy crisis in the country. Among the sanctions is the controversial suspension of the Nordstream 2 Pipeline, which critics, including former German Chancellor Gerhard Schroder, have called a mistake, and urged to be opened.
The German government has said it wants to reduce its energy dependence on Russia, which it claims was using “energy as a weapon”. In August, the German Chancellor Olaf Scholz visited Canada to start talks on buying liquefied natural gas (LNG) to help ease the energy shortage. But the problem is that Germany does not yet have the infrastructure to receive LNG imports from Canada.
“We have not built terminals for importing liquid natural gas to Germany at our own shores in the north,” he said in an interview with the Canadian public broadcaster CBC, on the show “Power & Politics”.
“This is what we are changing now … We will build ports, at many places, for importing natural gas, liquid natural gas, LNG, and this will really make a difference.”
On Friday, Gazprom announced it has indefinitely suspended gas deliveries to Europe through the Nord Stream 1 pipeline, citing technical reasons. The announcement arrived after G7 countries said they are working to impose a price cap on Russian oil exports. The objective of price cap is to reduce Russia’s revenues from its energy exports, which the G7 countries said was helping fund the war in Ukraine.
Avoiding the Worst
The energy price shocks for German industry have been so severe that the “de-industrialisation” of Germany, once deemed the unbeatable industrial superpower of Europe, has become common talk.
The President of the German Chamber of Commerce and Industry said concrete measures were urgently needed, in order to prevent the worst from happening.
“We now need clarity quickly about effective reductions in electricity and gas costs,” he explained.