According to Economics Minister Robert Habeck (Greens), the steep rise in energy prices means that the German economy faces a triple risk of a loss of purchasing power, the threat of a credit crunch and weak investment.
According to Economics Minister Robert Habeck (Greens), the steep rise in energy prices means that the German economy faces a triple risk of a loss of purchasing power, the threat of a credit crunch and weak investment. “The momentum that is now being created by speculation about fossil fuels alone threatens to slide into a recession,” said Habeck on Wednesday at an event organized by the Bavarian Business Association (vbw) in Munich. vbw President Wolfram Hatz called on Habeck to extend the life of the last three German nuclear power plants, which Habeck rejected.
All three scenarios are “not quite there yet,” said the Economics Minister. “But they threaten to hit the German economy deeply, regardless of whether Putin completely turns off the gas tap or not.” The good thing is that the federal government can give political answers to all three scenarios in order to maintain purchasing power, maintain the flow of credit and encourage investment.
Approximately 50 percent of society are “running towards a situation where they earn less than they spend,” said Habeck on the loss of purchasing power. There is a growing reluctance to invest in companies, and there is a growing reluctance among banks to grant loans. “In addition to a weak purchasing power, there is a scenario in which a capital or credit crunch threatens the economic strength of this country.”
All information on the political developments and voices on the war can be found in our ticker Political developments and voices on the war – Habeck: “We are still facing enormous price increases”