Fight the “chance profits” of the energy companies

Good morning, dear readers,

among the intricacies of current policy is the difference between “over wins” and “accidental wins.” Both are expressions of non-competitive oligopolies that have become the norm in a system that was once called the “market economy”. But “excess profits” are the size against which the EU Commission wants to take action when it comes to energy in the electricity companies. The federal government, on the other hand, verbalizes “accidental profits” of the energy companies. They are to be skimmed off for the benefit of consumers in order to curb the price of electricity.

A paper by Robert Habeck from the Federal Ministry of Economics that is available to us shows how similar the construct is to the gas price brake proposed by a commission of experts. Every household should therefore receive a basic quota of discounted electricity, with gas it is 80 percent of historical consumption.

Beautiful, sparsely populated Norway with its fjords, plateaus and mountains also belongs in the group of accidental, over or, let’s say, war winners. The country made money by extracting gas and oil in the North Sea. German and French politicians complain about this in unison, but they are currently not getting anything together. Industry inflation, triggered by Vladimir Putin’s war rage, leads to an explosion in sales in Oslo. While Norway still delivered gas to the EU for two billion euros in 2020, in the first half of 2022 alone – largely through price increases – ten billion euros were generated.

And what does the Norwegian head of government, Jonas Gahr Støre, say in an interview with the Handelsblatt?

• He generalizes: “There are no winners in war, only losers on all sides. These prices are a result of gas shortages. They are a result of Putin’s war.”
• He shows himself to be a solidary seller: “The most important contribution Norway can make to Europe is to produce and export gas. We encourage companies to consider long-term supply deals that could help stabilize markets.”
• He shifts responsibility: “It’s not the Norwegian government that sells gas, it’s Norwegian and European companies that get licenses according to government regulations.”

Norway will play a role at the EU summit today, Thursday and Friday. In the future, the member countries want to buy together from such countries by collective order. Støre warns vigorously of the price cap under discussion – it would severely disrupt his business, which ultimately has to compensate for the Norwegian sovereign wealth fund’s losses on the stock exchanges.

In the UK, Liz Truss is running for the Golden Lemon title of shortest-serving government official. Yesterday she came a step closer to leaving office. Home Secretary Suella Braverman resigned days after Chancellor of the Exchequer Kwasi Kwarteng stepped down. The right-wing hard-liner criticized the immigration and deportation policy, which she says is too lax. She recently railed in parliament about “tofu-eating” leftists.

She is succeeded by ex-Transport Secretary Grant Shapps, a moderate Conservative. Last night, again, the Tories struggled to rally against a ban on fracking that the Labor opposition was calling for. The whole thing was explosive, as many Tories criticize fracking and reject Truss’ lifting of a moratorium on environmentally harmful energy production. At first, the Conservative group leadership even wanted to jazz up the Westminster event for a vote of confidence in the government, but then they preferred to keep the ball flat.

Liz Truss still rejects her own resignation, despite all the malice about her: “I’m a fighter and not a slacker.”

The German observer can only think of Wilhelm Busch: “No evil is so great that it cannot be surpassed by a new one.”

For a change, let’s go to our capital, whose state of imperfection could be described as amusing and extraordinary, but also terribly dysfunctional. Things are often more efficient in Third World countries. In the matter of the technically completely botched 2021 federal election, the election examination committee of the Bundestag actually wants to decide today to repeat the election in 431 Berlin electoral districts – in 16 percent of all 2256 electoral districts.

The SPD, Greens and FDP explain that the same ballot papers should be used, i.e. with a first and second vote. It’s a way of making amends for the citizens who stood in front of locked polling stations at the time, didn’t have ballot papers or were still unable to vote later that evening – because the line was so long.

Conclusion: It cannot be ruled out that the ballot paper will become a receipt for some Berliners in the repeat election.

Today, Thursday, the Bundestag is discussing an application by the Union faction to also help research in Germany with a relief package and an emergency fund in the energy crisis. Federal Research Minister Bettina Stark-Watzinger (FDP) does not want to be left behind. Research institutions should also be under the economic defense umbrella, the politician demands in the Handelsblatt: “Because research is the key to overcoming the current and future crises as well as to growth and prosperity.”

She sees cutting-edge research threatened by rising energy prices. According to the ministry, the four non-university research institutions – Max Planck Society, Fraunhofer Society, Leibniz Association and Helmholtz Association – expect energy costs to rise sharply. They could increase from 324 million euros in 2021 to up to 780 million euros in 2023. The money would clearly be in better hands with the researchers than with some energy managers.

And then there is the multi-entrepreneur and ex-Prime Minister Silvio Berlusconi, 86, who is considered a Christian Democrat in Brussels but sees himself as a good friend of warlord Putin. Before MPs from his party Forza Italia, under the seal of secrecy, he showed suspiciously much understanding for Russia’s attack on Ukraine. An audio recording of his performance can be heard accusing Ukraine of violating the 2014 Minsk peace accord by attacking the “newly formed republics in Donbass.” They then asked Russia for help.

“I’ve restored my connection to President Putin a bit,” the old man announced. After Putin sent him “20 bottles of vodka and a really nice letter” for his birthday, he “replied with bottles of Lambrusco and an equally sweet letter.” Berlusconi merely told “an old story,” puts a spokesman into perspective. Perhaps praising the Kremlin is a little too much for Europe if Forza Italia is to become part of a right-wing government led by neo-fascist electoral winner Giorgia Meloni.

From Tacitus we learned: “In Rome all sins and vices flow together to be glorified.”

Have a wonderful day, maybe you’ll find some Lambrusco.

It greets you cordially

Her

Hans Jürgen Jakobs

PS: I’m looking forward to the “University Innovation Challenge” in Frankfurt next Thursday, October 27th. Student start-ups that have made it to the final round compete in battles. The winners will be chosen at the award ceremony in the “Casino”, an architectural heritage of Hans Poelzig and his wife Marlene Moeschke-Poelzig. If you would like to be there, you can register here for free.