German Minister Warns Of ‘Catastrophic’ Industrial Shutdowns And Mass Unemployment If Gas Crisis Continues
Share this @internewscast.com


Topline

Germany’s economy minister Robert Habeck said the country’s federal government is attempting to stabilize energy supplies but warned of potential industry shutdowns and job losses if gas reserves run low in the winter, a day after he said Russia’s throttling of natural gas supply to Germany could ripple into a Lehman Brothers-style collapse of the energy sector.

Key Facts

In an interview with German magazine Der Spiegel, Habeck said Germany has never been in a situation like the current “gas crisis” adding that the government was trying to procure replacements and expand its natural gas infrastructure to counteract the drop in supply from Russia.

Habeck once again urged the German people to cut back on gas consumption wherever possible.

The minister said if the government’s efforts to resolve the crisis fail and there is not enough gas some industries that consume the fuel will have to be shut down, which could be “catastrophic.”

He added that the impact of such a shutdown will be felt for a long time, not “two days or weeks” and many people would lose their jobs.

Habeck also noted that more people will feel the pinch of the gas shortage and high prices as the cost is gradually passed down to the consumers.

On Putin’s plan, the minister said the Russian leader was gradually throttling gas supply volumes and keeping prices high in an effort to increase “insecurity and fear,” fan populism and undermine democracy.

Crucial Quote

Speaking at a press conference on Thursday, Habeck pointed to a chart projecting a depletion in the country’s gas storage levels and said: “If this minus gets so big that they can’t carry it anymore, the whole market is in danger of collapsing at some point… a Lehman effect in the energy system.” Drawing parallels with the collapse of the Lehman Brothers investment bank in 2008 the fallout of which snowballed into the 2008 global financial crisis and the Great Recession.

Key Background

Habeck’s grim warnings come just a day after Germany triggered the second phase of its three-stage gas emergency plan in response to a reduction in the flow of gas from Russia through the Nord Stream 1 pipeline since June 14. Habeck said the security of supply was still guaranteed as the country has 58% more gas available in storage compared to last year. Despite this additional moves were needed to ensure that the German government meets its target storage level of 90% by December. The minister labeled the drop in gas supplies as an “economic attack” by Putin. If the requisite supply of gas is not secured, Germany may be forced to trigger the final “emergency phase” of the plan, where the federal government takes over the distribution of gas and carries out rationing. The Russian state-run gas giant Gazprom has attributed the reduction of supplies to equipment issues and suggested that a fix may not happen anytime soon. Gazprom previously suspended supplies to Poland, Bulgaria, Netherlands, Denmark and Finland after they refused to comply with Moscow’s mandate to pay for the gas using a rubles bank account.

Further Reading

‘Putin wants our country to disintegrate’ (Der Spiegel)

Germany Decries ‘Economic Attack’ By Putin As It Inches Towards Gas Rationing (Forbes)

Share this @internewscast.com
You May Also Like

Gavi Threatens To Leave FC Barcelona If Bernardo Silva Signs From Manchester City

Gavi is threatening to leave FC Barcelona if they sign Bernardo Silva…

New England Patriots’ Anfernee Jennings Back In The Linebacker Conversation After A Season Away

Third-year New England Patriots linebacker Anfernee Jennings spent the entirety of the…

Are my British Gas shares from 1986 worthless?

My cousin found 200 British Gas shares from its float in 1986…

Promoting The Free Economy In Brazil

Latin America is going bad – very bad. Many of the region’s…

Bayern Munich Beat Frankfurt 6-1 Further Underlining Their Bundesliga Dominance

Sadio Mané led Bayern Munich to a 6-1 victory over Eintracht Frankfurt…

What To Watch For In Tripadvisor’s Stock Post Q2?

CHINA – 2021/12/09: In this photo illustration the American travel agency and…

CSX Railroad Chief Hays T. Watkins Promoted One-Stop Shipping

When Hays T. Watkins was 4, his parents noticed that he had…

The Bitcoin artists on minting NFTs and OpenSea

“Art is not a thing, it is a way,” said American writer…