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Germany’s Union Head Warns of Collapse of Entire Industries

By Kemal Pasha

Top German industries could face collapse because of cuts in the supplies of Russian natural gas, the country’s top union official warned before crisis talks with Chancellor Olaf Scholz starting Monday.

Bloomberg News

Alexander Kell

Publishing date:

Jul 03, 2022  •  18 minutes ago  •  1 minute read  •  Join the conversation

KREFELD, GERMANY - APRIL 21: Workers prepare to pour ductile iron casting molten iron into a mould at the Siempelkamp Giesserei foundry on April 21, 2022 in Krefeld, Germany. The Siempelkamp foundry is one of many companies in Germany's manufacturing sector that would be acutely affected by a halt of Russian energy imports, especially natural gas. The company, which makes parts including for applications in the renewable energies sector, is one of the few in Europe that can cast pieces up to 300 tons. A company spokesman said that a disruption to Germany's natural gas supply would bring much of the foundry's manufacturing ability to a halt. In addition Siempelkamp is already facing multifold price increases for its raw materials, including scrap iron, nickel, aluminum and other metals, due to the current EU sanctions against Russia. The German government is currently wrestling with how it can reduce Germany's heavy dependence on Russian energy imports in the wake of Russia's military invasion of Ukraine.
KREFELD, GERMANY – APRIL 21: Workers prepare to pour ductile iron casting molten iron into a mould at the Siempelkamp Giesserei foundry on April 21, 2022 in Krefeld, Germany. The Siempelkamp foundry is one of many companies in Germany’s manufacturing sector that would be acutely affected by a halt of Russian energy imports, especially natural gas. The company, which makes parts including for applications in the renewable energies sector, is one of the few in Europe that can cast pieces up to 300 tons. A company spokesman said that a disruption to Germany’s natural gas supply would bring much of the foundry’s manufacturing ability to a halt. In addition Siempelkamp is already facing multifold price increases for its raw materials, including scrap iron, nickel, aluminum and other metals, due to the current EU sanctions against Russia. The German government is currently wrestling with how it can reduce Germany’s heavy dependence on Russian energy imports in the wake of Russia’s military invasion of Ukraine. Photo by Sascha Schuermann /Photographer: Sascha Schuermann/

(Bloomberg) — Top German industries could face collapse because of cuts in the supplies of Russian natural gas, the country’s top union official warned before crisis talks with Chancellor Olaf Scholz starting Monday. 

“Because of the gas bottlenecks, entire industries are in danger of permanently collapsing: aluminum, glass, the chemical industry,” said Yasmin Fahimi, the head of the German Federation of Trade Unions (DGB), in an interview with the newspaper Bild am Sonntag. “Such a collapse would have massive consequences for the entire economy and jobs in Germany.”

The energy crisis is already driving inflation to record highs, she said. Fahimi is calling for a price cap on energy for households. The rising costs for Co2 emissions mean further burdens for households and companies, Fahimi added. The crisis could lead to social and labor unrest, she said.  

Economics Minister Robert Habeck said on Saturday that the government is working on ways to address the surging costs both utilities and their customers face, without giving details. Earlier he had warned that the squeeze on Russian gas supplies risks creating deeper turmoil, likening the situation to the role of Lehman Brothers in triggering the financial crisis in 2008.

Russia has reduced shipments through Nord Stream pipeline by 60% and the pipeline is scheduled for a full shutdown this month for maintenance. Germany has raised doubts that Nord Stream will resume supply after that.

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Kemal Pasha