German politicians reject calls to turn off households’ gas first in emergency

The head of the Federal Network Agency - as well as German politicians - have dismissed calls for households to have their energy turned off first if Russia decides to withhold gas.

Flats in Stuttgart
Apartment buildings in the centre of Stuttgart. Photo: picture alliance/dpa | Marijan Murat

In an interview with German regional newspaper, the Rheinische Post on Friday, Klaus Müller rejected demands for industry to be given preference if gas deliveries from Russia are cut off.

Slamming the idea of turning off the tap for households, Federal Network Agency boss Müller said that different interest groups shouldn’t be played off against each other. 

“The question of what I can or must do in a gas emergency at home to save gas, CO2 and money so that our country as a whole comes through the crisis well – that is a legitimate question,” he said. “But it applies equally to industry and private consumers – no group should be played off against the other.” 

Currently, the supply of energy for private households is protected by law in the event of an emergency, but with concerns growing that Russia could use energy supplies to Germany as a weapon, industry heavyweights are calling for a change of priorities.

In an interview with Manager Magazin on Thursday, Eon Supervisory Board Chairman Karl-Ludwig Kley called on politicians to think about reversing the order of its emergency plan and shutting down private consumers before industry.

Kley said the entire national economy, and with it people’s incomes, depended on industry remaining able to work, adding that it made sense to prioritise business along with critical infrastructure like hospitals. 


‘Out of order’

Politicians from the conservatives (CDU and CSU) and Social Democrats (SPD) also lined up on Friday to reject Kley’s proposals for companies be supplied with the remaining gas reserves for longer than private households.

“The economy must be there for the people and not the other way round,” SPD politician Ralf Stegner told Bild. “Demands to change the prioritisation of gas are completely out of order.” 

Andreas Jung (CDU), member of the Bundestag Committee for Climate Protection and Energy, also rebuffed the proposals.

“There must be another sensitive discussion about where which savings are justifiable,” he said. “But one thing is clear: nobody should freeze, and private households need special protection.”

Speaking to the Rheinische Post, Michael Hüther, head of the Institute of the German Economy (IW), warned against cutting off private households before industry in the event of a gas supply freeze.

“I understand the concern to supply industry with gas as long as possible,” he said. “But it is not for legal reasons that households are considered protected customers.

“Switching off households would also be linked to safety issues: above all, it would also not even be possible for the grid agency to safely plan a mass disconnection in advance.”

READ ALSO: ANALYSIS: How badly would a Russian gas embargo hurt ordinary Germans?

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Why German bank customers could soon pay less for their account

A major German bank is set to scrap fees on large balances - and a number of others look set to follow. Here's why people in Germany may be paying less for their savings or current account in the near future.

Why German bank customers could soon pay less for their account

What’s going on? 

Interest rates have been at rock-bottom levels for years, making it much harder for people to get returns on their savings.

In recent years, many banks have even been levying what’s known as negative interest rates on customers. If interest normally incentivises people to save by helping them to grow their money, negative interest basically does the opposite.

If you have a certain amount of money in the bank, your bank will charge you negative interest via a deposit holding fee, which will usually be a certain percentage of your balance.

With N26, for example, balances of over €50,000 are subject to a 0.5 percent fee each year. For a balance of exactly €50,000, that equates to €250 in bank charges just for keeping your money there. 

Some banks even charge a deposit holding fee for balances as low as €5,000 or €10,000 in a current account. 

On Tuesday, ING Deutschland became the first bank to announce that it would be scrapping negative interest rates for the vast majority of its customers.

From July 1st, new customers of ING will be able to deposit up to €500,000 in their account without being charged for it, while existing customers will automatically have the fee-free amount raised to €500,000 from the current €50,000. 

Now, it seems a number of other German banks are planning similar moves. 

Why is ING Deutschland ending the holding fee?

Not entirely out of the goodness of its own heart – though that doesn’t stop it being good news for customers.

The European Central Bank (ECB) is set to make a decision on interest rates in the bloc this July, and most people expect that the bank is poised to increase interest rates from minus 0.5 percent to zero. 

Since banks have basically been passing on the ECB’s fees to their own customers, a hike in the ECB’s interest rate would spell the end of most negative interest-rate accounts in any case. But ING Deutschland said it wanted to pass on the positive interest rate trend to its customers even earlier.

READ ALSO: EXPLAINED: How to save money on your taxes in Germany

“With the increase in the fee-free allowance for credit balances on the current and extra accounts, the deposit fee is no longer applicable for 99.9 percent of our customers,” said Nick Jue, chief executive officer of ING in Germany. “We were one of the last banks to introduce a deposit holding fee and one of the first to virtually abolish it.”

He added that the bank had already kept its promise to abolish the holding fee for almost all customers before the European Central Bank made its decision.

Does this have anything to do with that court decision on bank charges?

That’s definitely a factor. According to a decision in Germany’s Federal Supreme Court last year, credit institutions have to obtain the consent of their customers when making changes to their fees and conditions.

That means that financial institutions have to ask for consent to current fees retrospectively if they don’t want hoards of people trying to claim their money back.

If a customer doesn’t consent to the fees, the bank will usually close that customer’s account.

Man signs a contract

A man in a suit fills in an official form. Photo: picture alliance/dpa/Pixabay | hnw-Gruppe

According to ING Deutschland, the scrapping of negative interest rates on balances up to €500,000 may help to sway those customers who have not yet agreed to the latest terms and conditions – including the deposit holding fee.

Anyone who agrees to the Ts&Cs will automatically be given the higher allowance as of July 1st.

“ING Deutschland expects that the increase in the allowances will convince in particular those customers who have not yet agreed to the General Terms and Conditions including the holding fee, and that the bank will thus terminate fewer customers than last planned,” ING said in a press release. 


What other banks are planning to do this?

According to reports in Bild and Bialo, the other banks planning on ending negative interest rates (or raising the threshold for fee-free balances like ING Deutschland has done) include:

  • Deutsche Bank
  • Commerzbank
  • Deutsche Apotheker- und Ärztebank (Apobank)
  • Dortmunder Volksbank
  • Hamburger Sparkasse (Haspa
  • Frankfurter Sparkasse
  • Frankfurter Volksbank
  • Mittelbrandenburgische Sparkasse
  • Nassauische Sparkasse (Naspa)
  • Ostsächsische Sparkasse Dresden
  • Sparda-Bank München
  • Sparda-Bank Südwest
  • Sparda-Bank West
  • Sparkasse Hannover
  • Sparkasse Pforzheim Calw
  • Volksbank Stuttgart

What does this mean for my savings?

There’s good news and bad news.

The good news is that, from July, you’ll no longer have to pay exorbitant charges just to store your money in a safe place – and you won’t be penalised for saving more. The bad news, on the other hand, is that low interest rates aren’t going away anytime soon.

So while you won’t be losing money hand over fist, you won’t be earning much of a return on your savings either.

Banks in Frankfurt

Skyscrapers in the financial district of Frankfurt am Main. Photo: picture alliance/dpa/dpa-Zentralbild | Fernando Gutierrez-Juarez

“If the interest rate environment continues to develop positively, we will also let our customers participate in this development,” said ING Deutschland’s Nick Jue. “However, the low-interest phase will continue for the time being and broadly diversified investments will remain important.”

Getting a securities account where your money is invested is one way to try and grow your savings, as is investing in property.

Of course, people with mortgages and other loans benefit from the low interest rates – which could be why the German property market is currently booming. 

READ ALSO: Five ways Germany’s soaring inflation could affect your life