Home Economy Germany Faces Mutiny as Scholz Battles ‘Biggest Crisis Country Has Ever Had’

Germany Faces Mutiny as Scholz Battles ‘Biggest Crisis Country Has Ever Had’

GERMANY is "facing the biggest crisis the country has ever had", trade bodies warned amid growing panic over the threat of a full shutdown of Russian gas flow.

by USA Citizens Network
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08:24, Fri, Jul 15, 2022

Businesses and consumers in Europe’s top economy could face significant energy-saving measures in the face of the looming gas crisis. As a draft emergency plan from the European Commission calls for public buildings, offices and commercial premises to be heated to a maximum of 19 degrees from autumn on, the Confederation of German Employers’ Associations (BDA) said the prospect of such measures was reflective of a “loss of prosperity” in Germany.

“We are facing the biggest crisis the country has ever had.”

“We have to be honest and say – we will lose the prosperity we had for years for the time being.”

The emergency plan, expected to be officially presented on July 20, said there was now a “significant risk” that Russia would fully halt gas supplies to Europe this year.

Companies that can replace gas should reduce their consumption, it says.

The warning echoes regular TV appearances by Vice-Chancellor and Economics Minister Robert Habeck in which he tells Germans to prepare for hard times ahead.

Nord Stream 1, a major gas pipeline from Russia to Germany, was brought out of action on Monday for routine maintenance.

It is due to get back to operation on July 21, but Berlin is concerned Moscow may not resume the flow of gas as scheduled.

Mr. Habeck said he fears Moscow may cite “some little technical detail” as a reason not to restart gas deliveries through the pipeline after this month’s works.

German officials are suspicious of the Kremlin’s intentions, particularly after Russia’s Gazprom last month reduced the gas flow through Nord Stream 1 by 60 percent.

The Russian-controlled energy giant cited technical problems involving a gas turbine powering a compressor station that partner Siemens Energy sent to Canada for overhaul.

That turbine could not be returned because of sanctions imposed after Russia’s invasion of Ukraine.

Ottawa said last weekend it would allow a time-limited and revocable permit for Siemens Canada to allow the machine’s return, citing the “very significant hardship” that the German economy would suffer without a sufficient gas supply.

Putin ‘continues to use energy as a weapon’ says Von der Leyen
Still, Gazprom refused to complete the repairs and get the gas back flowing.

The company said in a statement on Wednesday: “Gazprom does not have a single document that allows Siemens to bring back a gas turbine engine from Canada… for the Portovaya (station).

“In these circumstances, it is not possible to draw an objective conclusion about the further development of the situation on ensuring the safe operation of the Portovaya, which is a critical facility for the Nord Stream gas pipeline.”

German politicians previously dismissed Russia’s technical explanation for last month’s reduction in gas flows through Nord Stream 1, saying the decision was a political gambit to sow uncertainty and push up prices.

A spokesperson for the economy ministry said that while Germany was in a serious situation when it comes to its gas, supply is for now guaranteed.

Chancellor Olaf Scholz last week promoted his government’s bid to exit a long-standing dependency on Russian gas.

Russian Gas Reliance
Germany is battling to cut its reliance on Russian gas (Image: DAILY EXPRESS)
Speaking at the Economic Forum of his Social Democratic Party in Berlin, he said his coalition was rolling out new laws to prepare Germany “for a difficult, difficult situation”.

The emergency legislation mentioned by Mr Scholz would allow Berlin to bail out ailing energy companies and potentially introduce a levy that would equally distribute growing gas prices among private customers and companies.

Mr. Scholz, who is under scrutiny over dismal popularity ratings, said that efforts to get Germany off Russian gas were combined with the “very ambitious project” to make the country, and the entire European Union, completely emissions-free by 2045.

This, the Chancellor added, required “the largest industrial modernization in well over 100 years”.

Since taking office in December, the governing coalition of the centre-left Social Democrats (SPD), Green Party and business-friendly Free Democrats (FDP) has lost a significant amount of popularity.

Mr Scholz, a member of the SPD, is under pressure at home and abroad for his policies.

The 64-year-old has been accused of not providing enough support to Ukraine and of repeatedly delaying arms deliveries.

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