Noted children’s book author Robert Habeck, who is somehow also the German Minister of the Economy, turns out to know very little about his job or the industries he proposes to regulate. His gas surcharge scheme, conceived to keep the importer Uniper solvent in the face of skyrocketing prices, has now imploded and must be redrafted. It has emerged that, under his defunct proposal, many businesses not in danger of insolvency would have had a claim on the funds. This is probably because the bill was co-authored by the major energy companies themselves. In an extremely awkward speech, Habeck admitted that the problems with the law reflected his own ignorance of the gas industry and its internal complexities.
The entire Eurozone, as well as the United Kingdom, faces the worst cost-of-living crisis in modern memory. Already the German savings ratio has collapsed due to inflation, and this is well in advance of the true price shocks to come. Ulf Kempfer, vice-president of the German Association of Municipalities and mayor of Kiel, gave an interview to Welt that sheds light on the practical measures that are being contemplated to reduce electricity usage. Assuming that Nord Stream 1 continues to operate at one-fifth capacity, German energy consumption will have to be reduced by at least 20%; if the Russians cut off all gas, which they may well do, we’ll face a 40% shortfall. Even the best case here is a catastrophe that turning off street lights will not remedy. The biggest savings are to be had in reducing indoor heating, and cutting back on the use of warm water, refrigerators, washing machines and computers. Municipal services and office buildings will probably have to be closed, though some facilities, like public libraries, may be kept open as a refuge for those unable to heat their homes.