Companies refuse the gas price brake

Good morning dear readers,

“I come from the government and I’m here to help” – these are the words that scared him the most, Ronald Reagan once joked. And the state-skeptical former US President may well come to mind if you take a closer look at the gas price brake.

With many billions of euros, the German state is currently trying to help companies that don’t seem to need it that badly or don’t want it – at least not in view of the bureaucratic hurdles one has to jump over to get the aid.

Rolf Cramer, Managing Director of Druckguss Westfalen GmbH, says: “We would like to take advantage of the help, but the way the price brake is designed, we think that’s impossible.”

Karl Haeusgen, Head of Munich-based Hawe Hydraulics and President of the Association of German Machine and Plant Manufacturers (VDMA), sounds similar: “We didn’t include this aid in our planning for 2023 at first.”

He observes the same at other companies. And in the chemical industry, according to a survey, only a third of companies find the price brake in its current form helpful. One steel entrepreneur speaks of a “bureaucratic monster”.

One point of criticism: The maximum subsidy of 150 million euros for particularly energy-intensive companies is only available if the profit before taxes and depreciation for 2023 is at least 40 percent below that of 2021. Since medium-sized companies in particular are difficult to estimate future profits, they expect a nasty surprise.

In the end, there may be a risk of repayments of aid for which provisions from ongoing business would have to be made in the coming difficult months.

But let’s be honest: companies that are still making more than 60 percent of their previous profits despite the energy price shock don’t really need our tax money. You can survive the crisis without state aid – and let’s keep it up with Ronald Reagan.

The fact that wholesale gas prices have now fallen back to pre-Ukrainian war levels is helping to weather the price shocks. Also because the federal government has been very resolute in its search for new sources of natural gas – the state is helping in the right place here.

The Association of Gas Storage Operators also gave the all-clear on Tuesday. Germany is expected to get through the rest of winter 2022/2023 well. The association says: “Even at extremely low temperatures and the occurrence of risk factors, there is no gas shortage in Germany.” However, gas must continue to be saved as in the past few months.

The association is also cautiously giving the all-clear for the winter of 2023/2024: Even with reduced imports of liquefied natural gas (LNG) and a complete failure of Russian pipeline gas deliveries in other European countries, it is possible to fill the gas storage tanks again before next winter.

It is the acid test for every real democrat: If you think a decision is fundamentally wrong, but this decision was made in a democratically flawless way and all legal possibilities of objection have been exhausted – then you cannot in good conscience block the implementation.

But admittedly, in the case of Lützerath, this rational consideration is particularly difficult. The village in the Rhenish lignite mining area is to be demolished in order to extract even more of the extreme climate killer lignite. All this while the world is racing towards the 1.5 degree mark and intact nuclear power plants are being shut down – it is very difficult for the normal mind to comprehend.

Starting today, the area occupied by climate activists is expected to be cleared. Aachen’s police chief Dirk Weinspach expects “one of the most challenging operations in recent years” in Lützerath.

This should not only apply to police tactics – but also to political justification. The district administrator of the Heinsberg district, Stephan Pusch (CDU), who issued the “general decree” for the eviction, summed up the dilemma of the Democrats yesterday at a town hall meeting: “It is my duty to hold my head for this state.”

For Emmanuel Macron, this is the second attempt at pension reform – the French President canceled the first after months of protests at the beginning of the corona crisis.

Now it’s all hop: According to Macron, the French should retire at the earliest from 2030 at the age of 64. The retirement age, currently 62, is to increase gradually from September 2023, as Macron’s Prime Minister Élisabeth Borne announced on Tuesday evening in Paris.

Well, typical – in the future the good German will have to slave away until the age of 67, while the fine Frenchman is already slurping Brittany oysters full-time at the age of 64? Yes, one might think. But it is also true that a full-time employee covered by a collective bargaining agreement in France works an average of one week more per year than a German. In addition, the birth rate in France is higher, which alleviates the demographic pressure on pension funds.

In other words: by the time they retire, the average Frenchman has already worked almost a year longer than the German – and changed significantly more diapers.

In the National Assembly, where Macron’s government no longer has an absolute majority, the right-wing national Rassemblement National (RN) and the left-wing alliance around the Indomitable France party (La France Insoumise) are opposing the plans.

Conservative Republicans signaled they could help the President win a majority for pension reform. But before that, Macron will once again have to weather the strikes and protests by the French unions that have already been announced.

Yesterday I experienced once again how your own brain can play tricks on you late at night: Carsten Spohr was mistakenly changed to Jens Spohr in the morning briefing. Presumably I unconsciously wanted to merge the Lufthansa boss with another big aviator, namely Handelsblatt aviation reporter Jens Koenen.

Yes, there is a reason why pilots work with the dual control principle and checklists. At least no cockpit crew has ever flown me to the wrong airport due to a name mix-up. At most, my suitcase ended up there.

I wish you an error-free service… er, Wednesday.

Best regards

your

Christian Rickens

Editor-in-Chief Handelsblatt