Petr Fischer: Germany is in for a consumer shock that will not escape the Czech Republic either

Petr Fischer: Germany is in for a consumer shock that will not escape the Czech Republic either
Petr Fischer: Germany is in for a consumer shock that will not escape the Czech Republic either

The open gas war, which the Germans had been counting on since December, thus begins three months earlier. This is confirmed by the statement of Ukrainian President Volodymyr Zelensky, who stated in his regular video message that “Russia is preparing a decisive energy strike on all Europeans for this winter… it is trying to attack with poverty and chaos where it cannot attack with missiles”. It’s a shame that this message to Europe was not heard at the big weekend demonstration against the Vial government in Wenceslas Square, which hinted at what such an attack could look like. But Zelensky was well heard in Germany, there is nothing else politicians fear more than chaos and social unrest.

Despite all the problems this brings, Chancellor Scholz could say nothing more than that “Russia is an unreliable partner” and that “we will manage this crisis”. It is a statement aimed at the Czech Republic as well, because Russian gas also goes to the Czech and Moravian countries via Germany. Without gas from Nord Stream 1, even the Czechia will be dry. It all fits together nicely. The population in Western countries is getting nervous about the harsh winter, and the politicians are reassuring them that they can handle everything and that the winter will not be harsh.

Price increases in the Czech Republic – Development of basic food prices from 2015 to mid-2022

The key to such a claim is relatively full gas tanks. Both the Czech and German governments keep repeating that the reservoirs will sustain the country’s needs for three to four months. However, occupancy of around 85 percent is low for the whole winter. It would be enough from November to February, but not at all from September or October. Germany saved a fifth of its gas in industry, but the gas power plants, which could already have been replaced by other sources, continue to run at full capacity. In addition, statistics show that gas consumption in households is growing slightly. Gas provides 5.2 percent of Germany’s energy mix, the strongest source is coal, wind and solar power plants produce 40 percent, almost nine percent of consumption is provided by biomass, and almost eight nuclear power plants are to be shut down from next year.

Even at the dramatic weekend meeting of the government coalition (SPD, FDP, Greens) in the Berlin chancellery, where another, already third package of aid to citizens with high prices was being prepared, there was no discussion of the longer use of nuclear power plants. It seems that this is again a big taboo for the Greens and the SPD, and that it would come to a head in the most crisis-like variant, which, according to German Minister of Economy Robert Habeck (Greens), is not yet in danger. Among other things, because the Germans should have enough liquefied LNG gas from the Netherlands and other countries. They should also share this gas with the Czech Republic.

Calls to save energy are the order of the day, the head of the Federal Network Agency, Klaus Müller, has recently reiterated it. According to him, it depends on everyone whether the winter will pass without major fluctuations, but he did not recommend an extra sweater. The German government has offered citizens financial compensation in the latest package, the list of which is thirteen pages long. The government also promised support to employers. The total amount of support reaches 65 billion euros. The previous two packages totaled 30 billion euros. The German government therefore offers a total of 95 billion euros in aid. When comparing the population of Germany and the Czech Republic, this would mean state aid in the amount of 300 billion crowns. The Czech government has not yet offered such a high level of aid. They are talking about 170 billion.

Economists nevertheless expect a decline in the performance of the entire German economy. The recession is here whether we like it or not. Clemens Fuest, head of the prestigious economic Ifo Institute in Munich, nevertheless believes that “the situation will not be as bad as during the pandemic, but uncertainty prevails”. Translated into human language, this means that it will be a hard winter anyway, whether the Germans are freezing or not. The media, which immediately has a name for everything, is already writing that Germany is in for a “consumption shock” and it will surely not escape the Czech Republic either.

Less well-being can either strengthen us morally or tear us apart socially. Putin is counting on the second option. We’ll see how well he knows his fellow Europeans.

The author is an editorial associate

The article is in Czech

Tags: Petr Fischer Germany consumer shock escape Czech Republic

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