“We have to pay the bill anyway. The question is whether we do this now at the beginning,by intervening in the markets and by cushioning -- or whether in the end it is insolvencies,it is unemployment,” said Lars Klingbeil,co-head of Chancellor Olaf Scholz’s SPD,told the broadcaster ARD on Sunday. “I want us to take the first step,to intervene now.”
Germany’s government is allowing gas companies to pass on a fraction of higher costs to customers,but has so far avoided direct intervention,such as capping prices.
Traffic passes unilluminated buildings in the evening in Berlin,Germany. The German government is encouraging consumers and businesses to save energy in an effort to prevent a shortage during winter,Getty
European Union energy ministers last week called on the bloc’s executive arm to devise urgent measures to tame the price of gas and provide liquidity to traders hit by massive margin calls.
The ministers stopped short of calling for a mandatory reduction in energy consumption. Instead,countries are taking various steps to reduce demand,from turning down the temperature of public swimming pools to providing financial incentives to households to turn off the lights.
The German government has encouraged consumers and businesses to conserve energy in the months leading up to winter,resulting in darkened streets and office buildings in Berlin.
Russia has said it won’t supply gas to countries that sign up to gas caps,and some are worried about jeopardising the limited flows still coming to Europe.
Lars Klingbeil,co-chairman of the German Social Democratic Party.AP
About 40 per cent of the natural gas Europe uses for heat and electricity came from Russia before the war began in February,when Russia invaded Ukraine.
German Chancellor Olaf Scholz Saturday said the country is well-prepared if Russia cut off gas supplies entirely,but many economists and municipalities doubt that’s the case.
The crisis has been steadily worsening as Russia throttles supplies. Gas prices in Europe are about four times higher than a year ago,and the looming insolvency of key firms may grind the economy in Germany,Europe’s largest,to a halt.
Residential buildings are seen unilluminated in the evening in Berlin,Germany.Getty
The US has become concerned about the economic impact of an energy crisis in Europe,triggered by Russia.
Aides to President Biden have reviewed efforts to export liquefied natural gas to Europe,aiming to see if there’s any way for American producers to help,theWashington Post reported.
Bloomberg
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