Germany: Energy shortage hits investment and sends it to the bottom of the league table
Energy shortages plaguing Europe's largest economy since 2021 have impacted its attractiveness as an investment destination. Germany now ranks 18th out of 21 countries, dropping four places in the ranking compiled by German economic research institute ZEW, according to reports by the German newspaper Augsburger Allgemeine.
The institute cited rising energy costs and labor shortages for reviewing Germany's position in the rankings, as well as slow innovation and a complicated bureaucratic environment.
Soaring gas prices have shaken German industry and prompted the government to spend billions of euros to help businesses and households survive. Even with state aid, however, many German firms are reducing their operations or relocating them to low-energy locations such as the United States and Asia.
In September last year, the German government approved a 200 billion euro support package for businesses and households, which included a gas price cap, valid until spring 2024.
In addition to the support package, Germany, like other European Union countries, has imposed a tax on energy companies, also in force until spring 2024, thus inviting companies and households to save gas to make it more available.
According to the country's energy regulator, the Federal Network Agency, in 2022 the consumption of natural gas in Germany decreased by 14% compared to the average of the last four years.
Industrial demand decreased by 15% compared to the average of the last four years. Between October and December, industrial gas consumption decreased by 23%, while consumption by private consumers and businesses was 21% lower than in previous years. But the drop in industrial demand has come at the price of a drop in the output prospects they have, of course
However, energy costs have remained higher as Germany switched from gas from Russian pipelines to LNG, which has significantly increased its gas import bill compared to the past.
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The article Germany: the energy shortage hits investments and sends it to the bottom of the rankings comes from Scenari Economici .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/germania-la-carenza-energetica-colpisce-gli-investimenti-e-la-spedisce-in-fondo-alla-classifica/ on Mon, 16 Jan 2023 15:05:06 +0000.