Berlin In view of rapidly increasing energy costs, concerns about social conflicts are growing in Germany. After Chancellor Olaf Scholz (SPD) had warned of “social explosives” in society, several prime ministers are now sounding the alarm.
Saarland’s Prime Minister Anke Rehlinger (SPD) told the Handelsblatt that Russia was using gas shortages as a weapon to divide Europe. That shouldn’t happen. “Gas shortages can trigger a social crisis in the fall due to another sharp rise in prices.” There will therefore have to be further relief, especially for pensioners and low-income households.
Lower Saxony’s Prime Minister Stephan Weil (SPD) warned not to waste any time. “I can only advise us to act,” said Weil of the “Süddeutsche Zeitung”. “We have to be careful that an energy crisis doesn’t also turn into a social crisis.” The co-head of the SPD-Left, Sebastian Roloff, also sees a need for action. “Measures to cushion the costs ensure social peace and are therefore certainly necessary,” said the member of the Bundestag to the Handelsblatt.
Concerns about a mood swing in the country are no coincidence. Deutsche Bank CEO Christian Sewing also warned at a banking conference in Frankfurt this week that social peace in Germany would be threatened if 40 percent of people said in surveys that they could no longer save at the end of the month. The situation could get worse.
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There has been speculation for days that Russia’s President Vladimir Putin could use the maintenance work on the Nord Stream 1 pipeline that started on Monday to turn off the gas tap on the route completely. Many economists then fear a severe economic slump in Germany.
DIW boss sees Germany facing “social ordeal”
The President of the German Institute for Economic Research (DIW), Marcel Fratzscher, told the Handelsblatt: “The current crisis could be the last drop that breaks the camel’s back of increasing social division.” Movements like the yellow vests in France are also in Germany possible.
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Fratzscher warned: “Explosive rents and an increasing risk of poverty in the last ten years, a split in education and health in the pandemic and now in inflation could present Germany with a social acid test.”
Rapidly rising prices are already causing problems for people in Germany in almost all areas of life. For example, tenants have to be prepared for significant cost increases. According to the leading association of the German housing industry GdW, due to the Russian war in Ukraine, prices across all types of energy rose by an average of 37 percent up to May.
For a one-person household, this means an additional burden of 508 euros per year compared to 2021. Significantly higher increases and a four-digit additional burden are to be expected. Against this background, a move by the listed housing group Vonovia caused great resentment. The industry giant wants to limit the heating output in many of its apartments due to impending gas shortages.
“In order to save as much gas as possible in our stocks, we will successively introduce a night-time reduction in the heating temperature for the gas central heating systems in our stocks,” said a Vonovia spokesman. Vonovia reduces the heating output between 11 p.m. and 6 a.m. to 17 degrees Celsius. During the day and in the evening hours, the tenants could continue to heat as usual.
Traffic light politicians sharply criticize Vonovia
GdW President Axel Gedaschko also recommends this approach. Lowering the temperature reduces gas consumption in the building sector by up to 25 to 30 percent, he told the Handelsblatt. Instead of maintaining 20 to 21 degrees as has been customary up to now, 18 to 19 degrees could normally be sufficient voluntarily.
The SPD left Roloff is also of the opinion that everyone should save gas. “However, I consider it completely inappropriate and also inadmissible to implement such a measure as a housing group without the participation of the tenants.”
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The FDP housing politician Daniel Föst is also critical of Vonovia’s approach. “I don’t think much of unilateral measures by landlords,” he said. “In my opinion, people are very sensitized and are saving energy.” In the current situation, every individual is in demand. “As a society, it is now important to stand together.”
Green parliamentary group leader Andreas Audretsch sees the landlords as primarily responsible for saving energy. “Housing groups in particular with good profits should now invest in efficiency, heat pumps or solar roofs. We have to get away from Putin’s dirty energy,” he said.
Audretsch also believes that further relief is necessary, especially for lower income groups. “At the same time, those who have a lot, the richest in our country, will have to carry more,” said the Green politician. “You will have to give something to ensure social peace.”
FDP politician Föst was open to further help. “We have to relieve people and provide targeted support where energy prices are becoming a poverty trap,” he said. “This coalition will see to that.”
Chancellor Scholz is aiming for an “overall concept” for relief
The SPD-Linke Roloff also sees further need for action beyond the measures that have already been decided. The heating cost subsidy and the energy price flat rate would still be paid out and only then unfold their effect. Nevertheless, one must “make sure that we prepare more packages for the winter,” he said.
DIW boss Fratzscher pointed out the problem that almost 40 percent of Germans have practically no savings and no other protective mechanism to deal with the higher cost of living. “Politicians must now act decisively and should not try to calm people down with placebos such as one-off payments,” he said.
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From Fratzscher’s point of view, the key lies in the labor market. Because only through higher wages and better working conditions could people secure themselves better in the long term and take precautionary measures. “Social benefits must also be permanently increased,” warned the economist.
Chancellor Scholz warned, however, that the debate on new relief steps should be left to the so-called concerted action with trade unions and employers. On Monday, after the meeting with top representatives of the social partners, Scholz spoke of a crisis that would not be over in a few months.
The next meeting is scheduled for September. In view of the threat of further price increases, it is about an overall concept for what to do next, said Scholz.
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