Germany: without Russian gas, collapse of chemicals, aluminum and glass. -8% of GDP
Last month, Russia reduced Nordstream natural gas flows by 60% due to an alleged outage. German industries, which depend heavily on low-cost Russian natural gas, are facing skyrocketing energy costs that have put many of them in danger of collapse.
"Because of the bottlenecks of NatGas, entire industries are in danger of collapsing permanently: aluminum, glass, chemical industry," Yasmin Fahim I, head of the German Federation of Trade Unions, told the daily Bild am Sonntag .
Fahimi warned: "Such a collapse would have enormous consequences for the entire economy and for jobs in Germany."
A similar disaster has also been predicted by the Bundesbank, which predicts a collapse of German GDP by more than 8%, between direct and due to the breakdown of logistic chains, in 2023. A wartime disaster.
Economy Minister Robert Habeck, quoted Saturday by Bloomberg, said the government is working to address rising energy costs for public services and for businesses and households. He warned weeks ago that Germany should prepare for further cuts to NatGas, but even preparing for cuts does not produce gas, nor guarantee production.
Germany recently activated the “ alarm phase ” of its NatGas emergency plan to address shortages, given that the energy crisis in Europe's largest economy is far from over.
Habeck also compared the squeeze on Russian natural gas supplies and its damaging effects on industries to a catalyst that could trigger a crisis similar to that of Lehman Brothers. Frankly, it seems much worse to us: Lehman was an artificial and financial crisis, this is a crisis of production factors, yet the German head is so financialized that it is the same for them.
George Saravelos, Deutsche Bank's chief FX strategist, told clients a few days ago that he was increasingly concerned about the unfolding energy crisis in Germany. Saravelos pointed out that the decrease in natural gas supplies to Germany and the consequent spike in electricity prices have created enormous problems for industries and public services.
The biggest failure last week was that of the German gas and energy company Uniper. The company's shares plummeted because it received only 40% of the NatGas from Russia and the rest had to buy it on the open market (outside of long-term contracts), where prices have skyrocketed. This has created immense strain for the company, which has been losing up to $ 30 million a day, or if annualized, it could be a loss of $ 11 billion. Obviously the problem is the fall in stocks, not the fact that there is no gas to keep the industry going.
Sooner or later, Germany will learn, if this is due to economic disruption, that being pointed out as avant-garde of virtue to support the war in Ukraine was a bad idea, especially when you don't have the courage to extract your own gas with the techniques. of Fracking. However, a few beautiful winter nights in the cold and a few weeks without salary could convince even the most extreme real to rethink their positions … ..
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The article Germany: without Russian gas the collapse of chemistry, aluminum and glass. -8% of GDP comes from ScenariEconomici.it .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/germania-senza-gas-russo-crollo-della-chimica-alluminio-e-vetro-8-del-pil/ on Mon, 04 Jul 2022 14:19:24 +0000.