In a dramatic statement, German Industrial Association (BDI) head Siegfried Russwurm warned that with current energy and electricity prices “the substance of industry is threatened.” Russwurm released his statement after a meeting with the government, citing an indicator of “massive problems": Gas consumption by industry in July was 21% lower than last year. Behind such a figure there is no increase of productivity or shift to alternative energy sources, but rather “a dramatic plunge in production.”
He went on: “The situation is already toxic for many firms, now or shortly not only because of gas scarcity, but above all because of the absurd price increases.” Government aid through a reduction of the value added tax (VAT) helps only private households, while the industrial sector is bearing the full weight of the new gas levy.
The BDI report apparently shocked even Economy Minister Robert Habeck (Green), who said at the end of the cabinet meeting that the situation is “alarming.” Some firms “have completely ceased to produce,” which means that a whole set of industries “are not just being restructured, but experience a collapse, a structural collapse occurring under enormous pressure,” Habeck said according to the Financial Times.
Whether Habeck and his government colleagues act effectively to prevent the collapse is another question.
