Berlin: Germany could become ‘Bankrupt State’ due to energy spending
Germany is fearing its own demise at its own hands as the measures it takes to combat the ongoing energy crisis are causing its reserves to falter.
Germany could soon become a dysfunctional, bankrupt state if it stays on the same path it is currently on and fails to deal with the ongoing energy crisis in light of its imbalanced financial policies, Bundestag Vice-President Wolfgang Kubicki said Saturday.
“If we continue that way and want to provide energy assistance for years, then we could face state bankruptcy rather than state socialism,” Kubicki told the German Bild am Sonntag newspaper.
According to the Parliament’s deputy speaker, the extra money Germany is currently planning to spend on energy imports from elsewhere than Russia would be withdrawn from other areas, as the surplus can be “neither printed on a money printing machine nor covered by taxpayers.”
“Many people have a feeling that Germany is on the way to becoming a dysfunctional state. Infrastructure, governing, energy prices, and the inability of the Bundeswehr to defend its country – we have to take countermeasures; otherwise, things could go wrong,” Kubicki stressed.
German left-wing politician and chairman of the Bundestag committee on energy, Klaus Ernst, commented back in September on statements by Chancellor Olaf Scholz that the sanctions should not hit Europe harder than Russia itself: “We have now imposed seven packages of sanctions and Gazprom is making record profits. At the same time, we are threatened with a wave of bankruptcies. Therefore: negotiate with Russia with an open mind.”
German politician and fellow left-wing Bundestag member Sahra Wagenknecht condemned the government for dragging the country into a full-blown “economic war” with Russia who happened to be its top energy supplier, while she referred to the Bundestag concerning the fatal impacts that the Russian sanctions have on Germany.
The largest EU economy is anticipated to contract in 2023, as gas and electricity prices continue to skyrocket. According to the Ifo Institute for Economic Research, the Munich-based think tank, the ongoing energy crisis as a result of the war in Ukraine is “wreaking havoc” on the German economy and they project it could lead to a 0.3% drop in GDP next year.
The consecutive sanctions against Moscow prompted a race against the clock to diminish Germany’s reliance on Russian gas before winter. Groceries and food are other sectors experiencing the aftermath of soaring inflation which saw prices surge 12% in June before reaching 16.6% in August.
The Bundestag warned that Germany’s economic health is at stake considering the spiraling of energy prices out of control, which will serve as “a reminder of the good old days,” followed by Wagenknecht urging for the cancellation of restrictions and engaging in talks with Moscow.
Meanwhile, Germany’s gas exports have been a contentious issue within Berlin itself, with officials opposing that the Republic continue pumping oil and gas outside of its borders, with others arguing that Berlin should not abandon its allies within the European Union.
It was speculated that Germany might have to temporarily curtail its energy exports in the winter, including to France, one of the chief German energy importers.
For many years, Germany has been considered a key electricity exporter. According to data from the network regulator, last year, it supplied 17,400 GWh more electricity to other EU nations than it imported.
Germany’s main electricity buyers are France and Austria. According to statistics from the think tank Fraunhofer ISE, France imported 6,000 GWh of power from Germany from January to March this year, accounting for 5% of Germany’s total electricity production during that time period. According to the data, this amount was five times higher than in the same period the previous year.
According to analysts, a decline in German power exports may worsen supply shortages in France. Due to concerns with nuclear power plants, France may possibly suspend power deliveries to Italy for two years, according to speculations last month. However, France later denied these allegations.
The French government has urged the country’s national utility EDF to restart the country’s 32 presently inactive nuclear reactors as soon as feasible. They were taken offline early this year owing to corrosion issues and have since remained under maintenance. EDF has announced that its nuclear power output will fall to its lowest level in over 30 years owing to difficulties at the aging plants.
