Germany’s Mitteldeutscher Rundfunk (MDR) TV/radio station reports about an “incendiary letter to Chancellor Scholz” in which predominantly eastern German medium-size companies call for a rethink of the Russia sanctions. They see the economy at great risk.
“Mr. Scholz, stop and make a policy that we can live with and not sink"—with this urgent appeal, medium-size companies belonging to the Zentralkonsum eG association call on the German government to “readjust the embargo policy against Russia.” The association is the umbrella organization of the East German consumer cooperatives, whose member companies employ nearly 6,300 people, according to their own figures.
In an interview with MDR, Martin Bergner, spokesman for the association’s board, stated: “Stopping all gas deliveries and putting the German economy in front of price increases, at which no one can produce at a profit anymore, won’t work.” Sufficient gas must be imported to keep the economy running, he said. He further insisted that, existing nuclear and coal-fired power plants must also guarantee security of supply.
A bakery chain, Landbäckerei Stendal, reports that they have already been told that they would have to pay four times as much for electricity and six times as much for gas. Added to these would be the increase in the minimum wage in October and the gas levy, i.e., the additional costs that all consumers would have to pay, if, instead of cheap Russian gas, more expensive gas were purchased, such as from the United States.
The increased costs have passed on via the products, which in turn fuels inflation, whether in retail, hotels, restaurants or industry. This is by no means about diminished profits, the baking company says. “We are really in the red,” asserts Andreas Bosse, managing director of Landbäckerei Stendal, who expects his family business to lose as much as €300,000 already this year.
“It undermines the existence of the companies with damage that cannot be made good,” write the authors of the appeal to Scholz. Martin Bergner makes his point: “The government wants to promote regional products and organic products. But exactly these products are the first thing buyers do without in order to save money.” He adds that the Chancellor himself was once active in the Central Association of German Consumer Cooperatives. He should, therefore, know exactly what the situation is like for cooperatively organized businesses. The signers of the open letter, which charges the government with “being ideologically stuck,” also include prominent restaurants like Berghotel Oberhof and Dorotheenhof Weimar.
