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German Industry Sounds the Alarm as Deindustrialization Accelerates

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EIRNS—The leader of the Federation of German Industries (BDI) has called the government’s energy policies “absolutely toxic,” in an interview with the Feb. 6 Financial Times. BDI President Siegfried Russwurm said that Germany’s climate agenda was “more dogmatic than any other country I know.” The country’s radical climate policy has put German producers at a disadvantage to those in other industrialized nations, he said. “Nobody can say with any certainty today what our energy supply will look like in seven years’ time, and that’s why no one can say how high energy prices will be in Germany then,” he said. “For companies that have to make investment decisions, that is absolutely toxic.”

Germany’s plans to achieve carbon neutrality were “too dogmatic.” “We’re pursuing a goal of 100% when it’s obvious the last 10% is going to be incredibly expensive,” he said. Russwurm said business supported the green transition, but ministers had failed to explain to companies “what happens when the wind doesn’t blow and the Sun doesn’t shine.” “We still have no clarity on how and by when we can create reliable reserve capacity,” he said.

Russwurm compared the situation with France, where companies working in the same sector “pay half as much as they do in Germany for electricity.” (Of course, 62% of France’s energy still comes from cheap, safe, efficient nuclear, but FT doesn’t mention that) Not only energy, but also the increased taxes and bureaucracy are pushing companies to invest abroad. “Companies are saying they are finding it increasingly difficult to do any long-term planning,” Russwurm said. “They have great doubts about continuing to invest in Germany under these conditions. The conditions are better elsewhere. And they’re going abroad.”

Russwurm’s alarm bell might be too soft, too late. The day after he spoke to the FT, the German office of statistics released figures showing a strong decline in industrial output in December. Manufacturers produced 1.6% less than in November, and 3% less than in December 2023. It is the fourth monthly drop in a row and the sixth in seven months. Particularly strong is the drop in energy-intensive sectors, such as chemicals (7.6%, the lowest level since 1995), glass and glass articles, ceramic, metal and metal processing (5.8%). Building construction (3.4%), machines (1.6%) and electrical systems (3.5%) also cut their production.

Exports dropped 1.5%. Energy production increased, because of the cold season. [ccc]