Cover of the ft today, the powerhouse of the EU won't be the same again for a long time without its competitive advantage of cheap Russian gas
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German firms halt production to cope with rising energy prices
Economy minister Robert Habeck describes trend as ‘alarming’
German manufacturers are halting production in response to the surge in energy prices caused by Russia’s squeeze on gas supplies, a trend the government has described as “alarming”.
Robert Habeck, economy minister, said industry had worked hard to reduce its gas consumption in recent months, partly by switching to alternative fuels like oil, making its processes more efficient and reducing output.
But he said some companies had also “stopped production altogether” — a development he said was “alarming”.
“It’s not good news,” he said, “because it can mean that the industries in question aren’t just being restructured but are experiencing a rupture — a structural rupture, one that is happening under enormous pressure.”
Habeck said rising gas prices were affecting everyone from big industrial companies to small trading firms and the medium-sized enterprises that make up the “Mittelstand”. “Wherever energy is an important part of the business model, companies are experiencing sheer angst,” he said.
He said the business model of large parts of German manufacturing was based on the abundance of gas from Russia that was cheaper than gas from other regions. That competitive advantage “won’t come back any time soon, if it ever comes back at all”, Habeck said.
archived 31 Aug 2022 13:24:40 UTC
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