Berlin’s half-trillion-dollar bazooka may not be enough to keep the lights on if Germany continues to bleed funds to maintain it.
FRANKFURT: The German government is wasting money trying to keep the lights on. Since the conflict in Ukraine nine months ago shocked it into an energy crisis, it has lost close to half a trillion dollars, and that number is still growing.
According to the calculations done by Reuters, this is the total scale of the bailouts and schemes that the Berlin government has launched to prop up the energy system of the country since prices have skyrocketed and it has lost access to gas from its primary supplier, Russia. The schemes and bailouts have been launched to prop up the energy system of the country.
And it’s possible that won’t be enough.
Michael Groemling, a researcher at the German Economic Institute, was quoted as saying, “How severe this crisis will be and how long it will persist substantially relies on how the energy crisis will evolve” (IW).
“The national economy as a whole is going to have to deal with a significant reduction in wealth.”
According to the calculations, the amount of money that has been set aside could reach as high as 440 billion euros ($465 billion). These calculations provide the first combined tally of all of Germany’s initiatives aimed at preventing the country from running out of power and securing new sources of energy.
Since Russia invaded Ukraine on February 24, this amounts to almost 1.5 billion euros each day in losses. That’s about 12 percent of the total national economic output. That’s around 5,400 euros for each individual in Germany.
The most important economy in Europe, which has been known for a long time as a byword for careful planning, is suddenly at the mercy of the weather. The first winter in Germany in half a century in which it does not have access to Russian gas could bring about energy rationing in the case of an extended cold spell this winter.
