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UKRAINE

‘Whatever it takes’: Calls grow for painful German blockade of Russian gas

Germany has rejected a complete ban on Russian gas and oil imports over Russia invading Ukraine, but voices are growing louder for Berlin to ditch its economic imperative to take a moral stand. 

'Whatever it takes': Calls grow for painful German blockade of Russian gas
A natural gas station in eastern Germany. Photo: dpa-Zentralbild | Patrick Pleul

After the United States and Britain imposed a ban on Russian oil, pressure has mounted on German Chancellor Olaf Scholz’s government and other G7 members to follow suit.    

A group of climate activists, academics, authors and scientists published an open letter to the German government on Wednesday demanding a complete ban on Russian energy, reasoning that “we are all financing this war”.    

In a newspaper opinion piece this week, conservative lawmaker and foreign policy expert Norbert Roettgen also said the only correct course of action was to “stop Russia’s oil and gas business now”.    

“Nearly a billion euros ($1.1 billion) are being poured into (Russian President Vladimir) Putin’s war chests every day, thwarting our sanctions against the Russian central bank” and “for many Ukrainians, it will be too late if we hesitate now,” he wrote.    

So far, Scholz’s government has remained unmoved, reasoning that sanctions should not risk destabilising the countries imposing them.    

Since Germany imports more than half its gas and coal and about a third of its oil from Russia, experts say a transition period would be needed to avoid the lights going out.    

READ ALSO: How Germany could end its dependence on Russian energy

“If we end up in a situation where nurses and teachers are not coming to work, where we have no electricity for several days… Putin will have won part of the battle, because he will have plunged other countries into chaos,” Foreign Minister Annalena Baerbock warned on Tuesday.    

Underlining the precariousness of Germany’s situation, Baerbock also admitted in a separate interview that Economy Minister Robert Habeck, also of the ecologist Green party, was “urgently trying to buy hard coal worldwide”.    

Experts say a complete embargo would be painful, but not impossible.

‘Whatever it takes’

In a study published this week, nine economists argued that oil and coal from Russia could easily be replaced by imports from other countries, though this could be a little trickier for gas.    

If Russian gas cannot be fully compensated for by other suppliers, households and businesses “would have to accept a 30 percent drop in supply”, and Germany’s total energy consumption would dip by around eight percent, the study said.    

According to the economists, GDP could fall by 0.2 to 3 percent and the sanctions could cost each German between 80 and 1,000 euros a year, depending on how much Russian gas can be replaced.    

The Leopoldina National Academy of Sciences has also said that temporarily stopping Russian gas supplies would be tough but manageable for the German economy, “even if energy bottlenecks could occur in the coming winter”.    

But, to protect consumers against price hikes and to encourage the transition to renewable energy, significant government support would likely be needed.    

For the Sueddeutsche Zeitung newspaper, a war in Europe is an “emergency” that justifies continuing with the “whatever it takes” mentality spawned by the coronavirus pandemic.

“Germany can borrow money for this,” it said, arguing that a “rich” country like Germany “can and must afford” to step away from Russian energy.    

Observers have also noted that Germany has the option of delaying its nuclear exit – planned for the end of the year.   

Conservative Christoph Heusgen, a former adviser to Angela Merkel, told the ARD broadcaster that Germans are ready to turn down the heating to help.    

“People in Germany have shown such solidarity with the Ukrainians that they wouldn’t mind if it was a bit colder in their living rooms,” he said.    

According to a YouGov poll published this week, the majority of Germans would support a boycott of Russian oil and gas, with 54 percent of respondents saying they were strongly or somewhat in favour.

SEE ALSO: Russian energy imports ‘essential’ to Europeans’ lives, says German Chancellor

Member comments

  1. Shut the gas off. Don’t shut it off. Putin don’t care. He will sell it to china, they need it. And Germany and Europe will be in darkness. With skyrocketing prices. That doesn’t matter either really because the wealthiest can afford it. But average Joe is about to loose everything and suffer.

    Remember its all Putins fault. Absolutely nothing to do with 30 years of terrible policies.

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ENERGY

REVEALED: Germany’s planned hardship fund to help with energy bills

The gas and electricity price caps are coming, and the government wants to pay people's energy bills in December - but will that be enough to stop people falling into hardship? Germany's Economics Ministry thinks it won't be and has drafted plans for a new hardship fund. Here's what you need to know.

REVEALED: Germany's planned hardship fund to help with energy bills

When Germany’s traffic light coalition parties – the SPD, Greens and FDP – took office last December, they had no idea that they would be facing an energy crisis on such a major scale.

But with Russia’s invasion of Ukraine sending the gas market into turmoil, the coalition’s big plans have been put on the backburner as they work out how best to support people with rising costs. 

Under the latest set of energy relief measures put forward by the Gas Price Commission, the government will shoulder the cost of people’s energy bills this December. It also plans to introduce a cap on both electricity and gas prices, which will come into force next March and be backdated to January.

READ ALSO: Germany plans to cap energy prices from start of 2023

This multi-billion relief package is likely to soften the blow for many households, but according to a new government document obtained by Bild, ministers are concerned that it won’t be enough to stop many people – and businesses – falling into financial hardship.

To ensure this doesn’t happen, federal and state economists ministers want to set aside billions more for additional aid. 

Here’s who can get hold of the extra cash – and how.

Renters and private home owners

People who rent an apartment in Germany and home owners who live in their properties can access additional help from the state if they can prove they’re over-burdened by their heating and energy costs.

That could be due to an eye-wateringly high back-payment for energy bills demanded by the landlord or due to the fact that they have to purchase expensive fuel such as wood pellets for heating. 

More specifically, people claiming unemployment benefits such as Bürgergeld can get some extra cash from the Jobcenter after their bills are calculated by the landlord. If they’re facing a hefty back-payment, or Nachzahlung, they can get up to three months of Bürgergeld retroactively to help cover the costs. 

In addition, someone who wants to claim Bürgergeld for a single month will be spared from having to prove the amount of money they have in the bank. Under the ordinary rules for Bürgergeld claimants, job seekers must have less than €40,000 in savings.

According to the government’s calculations, this emergency buffer is set to cost around €500 million. Claims for additional support will be handled by the job centres or social offices.

Small- and medium-sized businesses (SMEs)

Small business owners have been among the hardest hit by the energy crisis – but luckily help may be on its way. 

In the document obtained by Bild, ministers say they assume that the gas and electricity price cap will be an adequate level of support for most SMEs. Nevertheless, there could be a few circumstances in which business owners slip through the net:

  • Business owners may already be facing huge hikes in their energy bills before the price caps come into force, for example in the form of a big back-payment for energy costs over several months, or
  • Businesses may find that, due to exceptional circumstances, they’re still unable to pay their bills – even after the price caps are introduced. 

In these two scenarios, SMEs can apply for extra support from the government. 

To be eligible, businesses must either show that their energy costs quadrupled at least three months between January and November 2022, or they’ll have to show that their energy costs have also multiplied in spite of the energy price cap and that their business is highly energy-intensive or costly.

The government expects this support package to cost around €1 billion and says that the details will be worked out after state premiers agree to the proposals.  

READ ALSO: How electricity prices are rising across Germany

Housing companies 

Large landlords could also be in line for some additional government aid under the ministers’ plans. Due to the way the current rental system works, many are paying high bills for heating and energy that they’re not yet able to recoup from tenants in the end-of-year bill.

Housing complexes in Berlin.

Housing complexes in Berlin. Photo: picture alliance/dpa | Monika Skolimowska

To help housing companies that are in this situation, the government wants to offer loans that could help tide them over. Twenty percent of this credit would be secured by the federal states, and the measure is expected to cost around €1.1 billion. 

Hospitals and care homes  

Care facilities and clinics face exorbitant energy bills – even in ordinary times – so this group of institutions will also be given financial aid, the draft said.

This will come in the form of a one-off support payment and ongoing support with gas and electricity bills. Hospitals and care homes will in many cases get their additional costs for energy completely refunded by the state until April 2024. Social agencies and social service providers will also be given subsidies and financial aid to help deal with their increased overheads. 

In addition, cultural sites and facilities like museums and art galleries will get subsidies intended to flatten out the rise in energy costs. In most cases, the energy price cap only applies to 80 percent of a business’ ordinary consumption, but this limit will be dispensed with for cultural institutions. 

However, the government says it still wants to incentive energy-saving measures as well as offering financial support. 

READ ALSO: When will people in Germany get their December gas bill payout?

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