Germany divided on the future of its economic model

Not a day goes by without a German politician making an act of contrition explaining that he was wrong about Vladimir Putin. “We’ve been lone screamers in the desert for over 15 years”laments Professor Claudia Kemfert, an economist at the DIW Institute in Berlin. Former Chancellor Angela Merkel is responsible for this energy policy which has made us dependent and politicians are acknowledging their mistakes.”

With the war in Ukraine, Germany became aware of its great dependence on fossil fuels imported from Russia. Our neighbor is therefore seeking to put an end to it until it no doubt has to rethink the economic model that has made it so successful in recent years. The task is dizzying and creates a lot of concern, especially in industry.

Apart from the former boss of Siemens, the big captains of industry have not participated in this work of transparency and explanation on Russia. Economist Claudia Kemfert notes that these bosses have, on the other hand, been very vocal in putting pressure on the government and opposing any energy embargo. “The national economy is taken hostage”according to Claudia Kemfert.

“Horror scenarios are presented that the whole economy would collapse if the chemical industry stopped receiving gas from Russia, when in fact it did not.”

Claudia Kemfert, economist

at franceinfo

Thus, the president of the BASF group, world number 1 in chemicals and the largest consumer of gas in Germany, fears “the most serious crisis since the end of the Second World War”. In the media, economists engage in battles of figures. On the ARD channel, Veronika Grimm, a renowned economist explains that an embargo “would lead to a 2-6% decline in the economy, not 20% as we often hear”. There will be no more than 3% drop, say researchers from the University of Bonn.

“It will not be 3%, it will be more”launches Martin Kopf, a big boss who envisages the worst-case scenario: “We can’t continue these embargoes like this or the industry in Germany is dead!” This representative of the German metallurgical sector claims that it cannot do without Russian gas: “We are going to lose hundreds of thousands of jobs from an economic point of view, I do not see what we are replacing this gas with. It was never a question before, because everyone felt safe. And then, why reduce imports of a much cheaper Russian gas. Gifts make you blind.”

In this extraordinary context, the German government recently placed a private Russian company under guardianship: Gazprom Germania. It’s unprecedented. A temporary measure that the German Economy Minister is ready to repeat for reasons of national security and supply.