German economy is sounding the alarm over expensive energy and lack of skilled workers | Germany | In-depth news and reporting from Berlin and beyond | DW

Working in a T-shirt during the German winter? This was once normal for mechanics working at the Rosier car dealership in the northern German city of Braunschweig. Their workshop was well heated.

Sales advisers and other Mercedes dealership staff even allowed fan heaters to be placed under their desks in their offices if they were not warm enough.

But that is a thing of the past. “We can’t afford this anymore,” said Stefan Becker, who heads the dealership.

Fan heaters are a bad idea and instead of 20 degrees Celsius (68 degrees Fahrenheit), the workshop will probably not be hotter than 15 degrees.

It is a sunny September morning when Becker explains his plans alongside Saskia Esken, co-chair of the centre-left ruling Social Democrats (SPD), who is on her way to Lower Saxony, which faces regional elections in early October.

“Gas and electricity are costing us about 2 million euros ($2 million) more a year than before,” Becker said as he gazed through the studio door at the hot day outside. .

The workshop doesn’t need heating yet, but it’s only a matter of time, he says.

SPD chairwoman Saskia Esken (g) has heard a lot of complaints – also from car mechanics

Esken looks serious as she listens to the car dealership. It is only when he complains that the photovoltaic system which has just been installed on the roof is no longer financially supported by the State that the politician interrupts him to ask him why he has not started to produce its own electricity than now.

“Because electricity and gas have always been cheap until now,” Becker replies with a shrug.

Wherever the co-leader of the SPD stops on her tour, there is only one subject: the German energy crisis which is turning into an economic crisis.

This even affects waste incineration plants. “People consume less, which produces less household and bulky waste, and you can feel it,” reports Bernard Kemper, managing director of Energy from Waste (EEW) in Helmstedt, a town in Lower Saxony.

Export waste? It was yesterday

The plant produces district heating, with which it supplies several thousand households in the region. “We have to find something so that we can meet our calorific value and therefore our contracts,” Kemper said.

Although worried, the plant operator and car dealership are among those who say they will likely make it through the winter financially.

In many other German industries, things look less rosy.

Bernard Kemper 8l) and Saskia Esken

The Bernard Kemper plant produces district heating which it supplies to several thousand homes in the region

“We have a dire economic situation, we are grappling with a rising inflation rate, immense energy prices and severe shortages of raw materials, intermediate products and other goods,” warned Rainer Dulger , President of the Confederation of German Employers’ Associations (BDA). at the German Employers’ Day held in Berlin on Tuesday.

In the business world, the atmosphere is deteriorating day by day. The crisis caused by the coronavirus is still fresh in the memory and now a new recession seems inevitable.

It is a paradoxical situation: many companies have full order books, but due to broken supply chains, there is a shortage of materials from all over the world.

The shortage of skilled labor is greater than ever and energy prices are becoming unaffordable. Bakers are feeling the effects just as much as steelmakers or chemical companies.

If customers cannot bear the price increases, manufacturers have only one option: reduce business operations or abandon production. But if a company does not make any more money, it risks insolvency.

According to surveys by trade associations, one in three companies in Germany already believe that their existence is under threat.

Robert Habeck speaking at the Deutscher Arbeitgebertag 2022 meeting

Economy Minister Robert Habeck promised support for German companies

How much will business protection cost?

Production restrictions also have far-reaching consequences for other businesses. There is a threat of a domino effect as chemicals and steel are basic materials that are needed everywhere.

The business community is calling for rapid help from the state, but with its aid measures, subsidies for heating costs, the increase in family allowances and the public transport ticket at 9 euros, the government s t has so far focused mainly on the population itself.

After strong protests from businesses, Economy Minister Robert Habeck also announced expanded protection for businesses, particularly for small and medium-sized businesses and skilled trades.

But how much will it cost in an emergency? Triple-digit billions, like the bridging measures put in place during the coronavirus pandemic? How many employees will be out of work in the winter and will need to be kept afloat with short-term severance? The Ministry of the Economy is still feverishly calculating the potential costs. Habeck had to admit on employers’ day that there was still no agreement in government on how much money was available for business aid.

Government announcements on controlling energy prices also seem less concrete. Chancellor Olaf Scholz (SPD) has promised rapid help with electricity: electricity producers who produce renewable energy and nuclear energy, which means that they have no additional costs but collect always high prices, must give up part of their so-called “windfall profits” to support poorer households and businesses.

Habeck believes that a corresponding regulation could come into force from the end of the year and said that it should also apply retroactively.

But the German government still has no quick fix for gas prices.

By the end of 2023, Germany will be completely independent of Russian gas. Thanks to the liquefied petroleum gas (LPG) import terminals which should be ready by then, all the necessary gas can then be obtained from other countries.

The raw material will then come from Norway, the United States and many other countries. Until then, it’s a matter of perseverance.

“We’ll probably get through this winter, and that’s good news for now,” said Chancellor Scholz, who doesn’t think there will be a gas shortage.

The German electric mix

Germany seeks to boost renewable energy

Polite applause for the Chancellor

Although this does not solve the high prices. Finding solutions to these must be the task of a commission of experts which includes scientists, employers and trade unionists.

But that is not enough for the employers’ associations, which rarely applauded the Chancellor on Employers’ Day 2022.

The business community misunderstands the government’s decision not to let the three nuclear power plants still in operation continue to operate beyond the end of the year.

The Chancellor said that precautions would be taken “to ensure that nuclear power plants in southern Germany can continue to operate in January, February and March, so that there is in no way a bottleneck on the German electricity market”. “

Entrepreneurs would have preferred a clearer commitment.

“What’s happening right now is like you’ve thrown all the lifeboats overboard on the Titanic, but at the same time the band is allowed to continue playing in the dining room,” said Dulger, president of the Confederation of German Employers. ‘ Associations. “This is not a responsible policy.”

This article was originally written in German.

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James R. Rhodes