SHARE
COPY LINK

CHINA

Germany’s Rösler fears EU-China trade war

German Economy Minister Philipp Rösler called on Wednesday for negotiations on a widening solar panel dispute between the EU and China to avoid an all-out trade war that could hit further sectors.

Germany's Rösler fears EU-China trade war
Photo: DPA

Rösler, speaking on Germany’s public ARD television, reiterated that Brussels’ decision on Tuesday to impose anti-dumping duties on solar panel imports from China was a “serious mistake”.

He said the German government had always made it clear that it wanted dialogue and not confrontation, and said the goal must be “to ultimately prevent a trade war that would encompass many more branches than just the photovoltaics branch”.

“The (EU) Commission now still has every chance to take the road of negotiations and avoid a trade war between the EU and China,” said Rösler, who is also vice chancellor in Chancellor Angela Merkel’s centre-right coalition government.

In response to the EU measures, Beijing announced Wednesday that it had opened an anti-dumping probe into European wine. Unlike Germany, France welcomed Brussels’ decision to levy the tariffs against China.

Rösler spoke out against “protectionist measures” ahead of a lunch last week with Chinese Premier Li Keqiang, who was on a visit to Germany, after Merkel vowed Berlin would do everything it could to ensure a negotiated solution to the brewing trade conflict.

AFP/mry

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.

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.

READ ALSO:

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.

SHOW COMMENTS