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ECONOMY

‘Tesla isn’t above law’: Gigafactory construction near Berlin halted amid environmental concerns

US automaker Tesla was forced to suspend forest clearing for a new German plant Tuesday after environmentalists won an injunction over threats to the habitats of resident lizards and snakes.

'Tesla isn't above law': Gigafactory construction near Berlin halted amid environmental concerns
Cut down trees on the Tesla construction site. Photo: DPA

The electric vehicle giant ran into opposition from two nature conservation groups which launched urgent court action against the felling of 83 hectares (205 acres) of pine trees for its huge “gigafactory” plant at Gruenheide, south of Berlin.

READ ALSO: Birds, bats and ants evicted for new Tesla plant near Berlin

The news risks delaying the company's hopes to roll its first electric cars off the assembly line at the site in July 2021.

The administrative court in Frankfurt an der Oder told AFP it issued an interim injunction Monday “imposing a temporary halt to clearing” to allow for an examination of the case “in view of the rapid progress of the clearing work”.

A final decision on the complaint filed by the Brandenburg state chapter of the Nature and Biodiversity Conservation Union (NABU) and Green League is still pending.

Among the concerns was the destruction of habitats of protected species of sand lizards and smooth snakes in the area, or disturbing them during their winter hibernation.

“Tesla cannot and must not place itself above the law,” said Heinz Herwig Mascher, chairman of the Green League in Brandenburg, in a statement.

The site of the Tesla factory. Photo: DPA

Despite the energy-saving image of Tesla, run by eccentric billionaire Elon Musk, the plant has long been in environmentalists' crosshairs.

In February, a court temporarily halted deforestation work over the alleged impact on wildlife and concerns it might harm the drinking water supply.

Work was also stopped earlier this year as authorities defused seven World War II bombs discovered at the site.

Tesla's first site in Europe still only has provisional construction permits, and has been authorised by local officials to begin work at its own risk, pending final authorisation.

READ ALSO: Tesla to build 'world's largest' battery plant near Berlin

Tesla said the land covered under the latest injunction must be cleared to allow for pipelines and storage, according to the Tagesspiegel newspaper.

Last week, Tesla was allowed to start installing machines in the gigafactory's paintshop, with the vast factory planned to churn out 500,000 Model 3 sedans and Model Y SUVs per year.

Musk recently announced the company was looking to build the world's largest battery factory at Gruenheide alongside the car plant.

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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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