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Global Economy

Industry warns of emigration

German industry warns that rising electricity and gas prices will have serious consequences for production. "The situation is so serious that even local medium-sized companies from various sectors have to think about relocating abroad," said the President of the Federation of German Industries (BDI), Siegfried Russwurm, in Berlin today.

According to a recent survey of 418 medium-sized companies of various sizes, regions and industrial sectors, 65 percent see the increased energy prices as a major challenge. Almost a quarter (23 percent) even describe the high prices as an existential challenge. 84 percent of companies are of the opinion that the federal government should reconsider the further increase in CO2 prices and supplement them with accompanying measures to relieve companies.

A fifth are considering emigration

According to the survey, around two-thirds (68 percent) can hardly pass the increased energy prices on to customers or consumers. The development of energy prices is forcing around a third of companies to postpone investments in the transformation to climate neutrality. A good fifth of the companies are apparently already thinking about relocating company shares or parts of production and jobs abroad in the near future. 13 percent are already there.

Russwurm pointed out that the increases in energy costs are higher than they have been since the oil crisis of the 1970s. Rising electricity and gas prices would threaten to crush the economy. "Rapid political action is required." The announced early abolition of the EEG surcharge on July 1, 2022 is correct, but not enough. "The federal government must finally make a clean sweep of national taxes and surcharges, such as electricity tax and network charges," demanded the President of Industry. National CO2 pricing is already an existential threat to many small and medium-sized companies.

The Steel and Metal Processing Industry Association also warned that the abolition of the EEG surcharge was not enough to counteract this. The federal government must relieve the middle class, "otherwise Germany will soon be without medium-sized industrial companies," said Managing Director Christian Vietmeyer. For companies that are in European and international competition and are dependent on fossil fuels, there must be compensation.

Consumer advocates are also calling for quick action

In addition to companies, consumers are also being burdened by the high energy prices. The Federal Association of Consumers (vzbv) said the traffic light coalition's plans for private individuals did not go far enough. Some of the measures are "far from sufficient or still completely unclear in their implementation," said Thomas Engelke, team leader for energy and construction in the vzbv, the newspapers of the Funke media group. The planned climate money – a compensation for the CO2 price – must be paid per capita, and the abolition of the EEG surcharge to reduce the electricity price must reach private households in full, Engelke demanded.

In addition, the heating cost subsidy for housing benefit recipients, students with BAföG and trainees with training money must be significantly higher than previously planned at an average of at least 500 euros per household. However, the consumer advice centers rejected an increase in the commuter allowance. This "would be the wrong way" because it would primarily benefit households with high incomes, said Marion Jungbluth, team leader for mobility and travel at vzbv. Instead, she called for a mobility allowance that is independent of income.

Yesterday, Federal Finance Minister Christian Lindner (FDP) promised that the traffic light coalition would present plans this week to relieve the burden on citizens because of the rise in energy prices. So far, only the heating cost subsidy has been decided by the cabinet. In addition, the SPD, Greens and FDP agree that the EEG surcharge should be abolished earlier than planned – if possible by the middle of the year. Possible further measures include an increase in the commuter allowance, an immediate child allowance and a climate premium.

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