Germany fears inevitable bankruptcy amid energy crisis
The Bundestag is calling on the country to negotiate with Russia “with an open mind” as anti-Russian sanctions begin to take their toll on the deteriorating economy and energy shortage.
In a tweet on Thursday, left-wing German politician and Bundestag Energy Committee Chairman Klaus Ernst referenced Chancellor Olaf Scholz’s statements that sanctions shouldn’t hit Europe harder than Russia. herself: “We have now imposed seven sanctions packages and Gazprom is making record profits. At the same time, we are threatened with a wave of bankruptcies. Therefore: negotiate with Russia with an open mind.”
The EU’s biggest economy is set to contract in 2023 as gas and electricity prices continue to soar. According to the Ifo Institute for Economic Research, the Munich-based think tank, the ongoing energy crisis following the war in Ukraine is “taking its toll” on the German economy and they predict it could lead to a decline by 0.3% of GDP next year.
Deutsche Bank CEO Christian Sewing previously said that “therefore, we will no longer be able to avoid a recession in Germany. Yet we believe our economy is resilient enough to weather this recession well – provided central banks act quickly and decisively now,” noting that for now many Germans still have pandemic economies on which fall back to deal with soaring energy costs. , while most companies remain “sufficiently funded”.
However, Sewing warned that “the longer inflation remains high, the greater the tension and the greater the potential for social conflict.”
The German government approved a 65 billion euro relief package on August 4, which includes ever cheaper public transport and tax breaks for energy-dependent companies, as they have been the most affected by the most sharp price spike.
According to the Federal Statistical Office, German inflation reached nearly 8% in August after falling slightly in June and July.
German politician and fellow left-winger Sahra Wagenknecht condemned the government for dragging the country into a full-scale ‘economic war’ with Russia, which happened to be its main energy supplier, as she referred in the Bundestag regarding the fatal impacts that the Russian sanctions are having on Germany.
The Bundestag has warned that Germany’s economic health is at stake as energy prices soar out of control, which will serve as a ‘reminder of the good old days’, followed by Wagenknecht calling for the cancellation restrictions and engaging in talks with Moscow.