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ENERGY

Hundreds of thousands have no electricity

Hundreds of thousands of Germans are likely going without power simply because they can’t afford the bills, according to a North Rhine-Westphalian consumer organisation studying the problem.

Hundreds of thousands have no electricity
Photo: DPA

According to the NRW Consumer Centre, more than 300,000 people in the state were threatened with a power shut-off and 62,000 financially struggling families actually had their electricity shut off in 2010 alone, the last year for which firm statistics are available.

Of the 58 companies the organisation surveyed, three-quarters reported that customers were having problems paying their bills, according to the organisation.

“Price increases of around 15 percent for electricity and gas in the past two years have meant that energy for many households is becoming an unaffordable commodity,” said Consumer Centre head Klaus Müller.

Müller estimated that roughly 120,000 households in North Rhine-Westphalia and 600,000 nationwide are today without power because of bill non-payment.

Under German law, power companies have to take a series of legal steps before cutting off someone’s power, including warning them multiple times. There are also protections making it harder to cut off power to vulnerable people, such as the disabled. But simply being unable or unwilling to pay bills is not a valid excuse.

The Local/DPA/mdm

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ECONOMY

German consumer prices set to rise steeply amid war in Ukraine

Russia's war in Ukraine is slowing down the economy and accelerating inflation in Germany, the Ifo Institute has claimed.

German consumer prices set to rise steeply amid war in Ukraine

According to the Munich-based economics institute, inflation is expected to rise from 5.1 to 6.1 percent in March. This would be the steepest rise in consumer prices since 1982.

Over the past few months, consumers in Germany have already had to battle with huge hikes in energy costs, fuel prices and increases in the price of other everyday commodities.

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With Russia and Ukraine representing major suppliers of wheat and grain, further price rises in the food market are also expected, putting an additional strain on tight incomes. 

At the same time, the ongoing conflict is set to put a dampener on the country’s annual growth forecasts. 

“We only expect growth of between 2.2 and 3.1 percent this year,” Ifo’s head of economic research Timo Wollmershäuser said on Wednesday. 

Due to the increase in the cost of living, consumers in Germany could lose around €6 billion in purchasing power by the end of March alone.

With public life in Germany returning to normal and manufacturers’ order books filling up, a significant rebound in the economy was expected this year. 

But the war “is dampening the economy through significantly higher commodity prices, sanctions, increasing supply bottlenecks for raw materials and intermediate products as well as increased economic uncertainty”, Wollmershäuser said.

Because of the current uncertainly, the Ifo Institute calculated two separate forecasts for the upcoming year.

In the optimistic scenario, the price of oil falls gradually from the current €101 per barrel to €82 by the end of the year, and the price of natural gas falls in parallel.

In the pessimistic scenario, the oil price rises to €140 per barrel by May and only then falls to €122 by the end of the year.

Energy costs have a particularly strong impact on private consumer spending.

They could rise between 3.7 and 5 percent, depending on the developments in Ukraine, sanctions on Russia and the German government’s ability to source its energy. 

On Wednesday, German media reported that the government was in the process of thrashing out an additional set of measures designed to support consumers with their rising energy costs.

The hotly debated measures are expected to be finalised on Wednesday evening and could include increased subsidies, a mobility allowance, a fuel rebate and a child bonus for families. 

READ ALSO: KEY POINTS: Germany’s proposals for future energy price relief

In one piece of positive news, the number of unemployed people in Germany should fall to below 2.3 million, according to the Ifo Institute.

However, short-time work, known as Kurzarbeit in German, is likely to increase significantly in the pessimistic scenario.

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