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German manufacturers seek govt help against energy-related shocks

Last week, Russian President Vladimir Putin instructed the government and the national energy giant Gazprom to switch payment for gas sales with countries that have imposed sanctions on Russia to rubles by the end of March. 

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Berlin: The German industrial companies have applied for government assistance to withstand the ongoing energy crisis, which they fear might deteriorate if Russian gas supplies stop, Director General of the Federation of German Industries (BDI), Joachim Lang, said on Wednesday.

On Wednesday, German Economy Minister Robert Habeck activated the early warning level in anticipation that Russia may cut off gas supplies due to sanctions.

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Later in the day, the German Council of Economic Experts (GCEE) said that the national GDP is expected to grow only by 1.8 per cent in 2022, down from a November forecast of 4.6 per cent.

“The federal government must preserve the economic strength of companies and help them mitigate the crisis,” Lang told German news agency dpa, adding that German companies “will face existential difficulties because of energy prices or because of Russia’s ban on the export of raw energy materials.”

Some energy-intensive factories were already forced to slow down production rates due to high gas and electricity costs, Lang added.

Lang urged the German government to provide the affected companies with “warranties, guarantees, loans and public investments” similar to the Covid-19 support packages. On February 24, Russia launched a military operation in Ukraine.

In response to Russia’s operation, Western countries have rolled out a comprehensive sanctions campaign against Moscow.

Last week, Russian President Vladimir Putin instructed the government and the national energy giant Gazprom to switch payment for gas sales with countries that have imposed sanctions on Russia to rubles by the end of March. 

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