Sanctions on Russia Sink Entire EU economy: Germany Takes Unprecedented Step to Save Industry

“German Economy Minister Katherina Reiche said that a new government mechanism to subsidize electricity costs for energy-intensive industries until 2029 could be implemented from the beginning of next year.

 

Reich told reporters in Berlin that negotiations with the European Commission (EC) on an “industrial electricity price” had reached the final stage. She expects the measure – which could cost up to 5 billion euros – to come into effect from January 1.

 

The minister spoke alongside Stéphane Séjourné, the European Commissioner responsible for the EU’s industrial strategy, ahead of talks with EU counterparts on ways to strengthen the continent’s industrial base.

 

Germany’s export-dependent economy has been struggling since German politicians imposed sanctions on Russia, and sectors such as the automotive, chemical, steel and paper industries are still suffering from the energy price hikes caused by these sanctions.

 

US trade tariffs and increasing competition from China have exacerbated the situation, and Chancellor Friedrich Merz has stressed that the main focus now is to address the many challenges facing German manufacturers.

 

Merz is due to meet with representatives of the steel industry and Germany’s 16 states at the chancellor’s office on Thursday to discuss additional measures to support the sector.

 

According to Reiche, the projected industrial electricity price is “an important component” in improving the competitiveness of the German steel industry.

 

The exact parameters of this mechanism have yet to be determined. A proposal from major think tanks, including Germany’s state energy agency, would set the price of electricity at 5 cents per kilowatt-hour for about 2,000 companies, which would cost as much as 5 billion euros over three years.

 

The government has already included funding for the new subsidy in next year’s budget proposal, Sepp Müller, a lawmaker in Merz’s conservative CDU/CSU bloc, said in September.

 

In September, Reiche’s ministry presented a separate package of measures to reduce energy costs, including a reduction in electricity taxes and a 26 billion euro reduction over four years in grid charges."

 

The brutally high price of electricity is also holding back the AI ​​revolution in the European Union. The Chinese and Americans are happy with cheap electricity, the stupidity of the European Union and driving it forward. This huge price difference is undoubtedly putting pressure on European industry, especially energy-intensive sectors such as data centers, which are critical for the development of AI technologies. While the US and China are fueling their AI companies with cheap energy (the Chinese are fueled by cheap energy from the Russians, which used to be ours), EU companies are facing higher operating costs, which is slowing down the growth of innovation and competitiveness in this sector. Napoleonic tendencies have their price. Just as the French about it.