De-industrialization would result
DGB and employers warn of gas embargo
4/18/2022 7:53 am
Trade unions and employers are unanimously warning of the consequences of a quick halt to imports of Russian gas. That would have immense effects on the German economy, which would then be significantly less able to support Ukraine.
Employers and trade unions are jointly warning of an import ban on Russian gas to Germany. Sanctions must be targeted, put pressure on the other side and prevent damage to one’s own economy as far as possible, say the chairman of the employers’ association BDA, Rainer Dulger, and the chairman of the German Trade Union Confederation (DGB), Reiner Hoffmann, in a joint statement. “We don’t see that with the currently discussed gas embargo.” According to Dulger and Hoffmann, the negative effects on the economy and employment would currently be greater in Germany than in Russia. “A rapid gas embargo in Germany would result in production losses, production standstills, further deindustrialization and sustained job losses.”
In order to continue to support Ukraine and to keep up the pressure on Russia, you need a stable economy and a stable labor market, according to the DGB and BDA. “We’ll still have a lot of challenges to overcome in the next few months. We can’t do that from a position of weakness.”
Because of the Russian attack on Ukraine, the EU has now decided to stop imports of Russian coal and imposed further unprecedented sanctions. There is also constant discussion about an immediate exit from Russian gas or oil. Germany and other countries have so far shied away from this for fear of economic damage. The chemical industry, for example, had pointed to its large consumption of oil and gas and warned of the massive consequences for the country’s value chains if there were longer plant failures. About 95 percent of all industrial products require chemical products.
Economics Minister Habeck is also skeptical
Economics Minister Robert Habeck recently told the newspapers of the Funke media group: “An immediate gas embargo would endanger social peace in Germany.” You have to act prudently, prepare steps carefully and be able to persevere if you want to harm Putin.
According to data from the Federal Institute for Geosciences and Natural Resources, Germany received more than 50 percent of its natural gas requirements from Russia in 2021. At the beginning of the month, the Ministry of Economics said that it could be possible by summer 2024 to become independent of Russian gas, apart from a few shares. But that also depends on the pace of the expansion of renewable energies in Germany – and on a reduction in consumption. The government is also trying to increase imports of liquefied natural gas (LNG) to secure Germany’s gas supply and reduce its reliance on Russian gas. The liquid gas is delivered by tankers.