The deputy editor-in-chief’s weekly recap

Good morning everyone,

I admit: I’ve never given much thought to electricity, possibly when moving. Meter readings, meter numbers – you know what I mean. Or when I read somewhere how much you can save by comparing different providers and tariffs, and how easy it is to switch.

Then I always decided to take a closer look at it, so that I could stick with the old contract in the end. Convenience won out, even if it cost a little more.

Those days are over. In these (war) days, we are not only concerned with the high price of electricity, but also with the market mechanism by which it is formed. Keyword: Merit order principle. What that is and how it affects the price of electricity, my colleagues answer these and other questions in an informative explanatory piece.

Despite all the complexity, one thing is clear: The electricity price is linked to the gas price. And that’s exactly what’s hitting us now, given the skyrocketing gas prices. That is why the EU and the federal government are discussing a reform of the electricity market. But it’s not that simple – and economists warn against intervening in pricing.

“Of course it would be nicer if you left the pricing to the market,” comments my colleague and energy expert Klaus Stratmann. However, it is also true that the electricity market is already extremely influenced by government actions.

He believes that politicians will now have to lend a hand again – and draws a bitter conclusion: “Various proposals are on the table. All have serious disadvantages. But the current situation is no longer acceptable.” We are excited to see what is to come.

What else kept us busy this week:

1. We are also looking forward to the coalition committee that is meeting this Saturday. The heads of the traffic light government want to decide on a third relief package after their cabinet meeting at Meseberg Castle. In addition to Chancellor Olaf Scholz, Economics Minister Robert Habeck and Finance Minister Christian Lindner, the party and faction leaders of the SPD, Greens and FDP will also be there. A team from our Berlin office describes what measures the federal government could adopt to cushion the high energy prices. Will it be as “powerful” as Scholz announced?
2. Relief is one thing that the federal government has to take care of. The other is the security of supply – especially against the background of Russia’s announcement on Friday evening that, contrary to what was announced, no gas will continue to flow through the Nord Stream 1 Baltic Sea pipeline from today. This also includes the controversial discussion about extending the service life of German nuclear power plants. The second stress test on security of supply commissioned by Economics Minister Habeck indicates that electricity from nuclear power is likely to be available in Germany for longer than planned. Accordingly, the Handelsblatt learned from industry circles, it could make sense not to take two of the three still active reactors off the grid at the end of the year.

3. Speaking of security of supply: Poland had freed itself from dependence on Russia in an exemplary manner, at least that’s how it seemed. Moscow turned off the country’s gas supply early in the year, and Warsaw immediately took countermeasures. But now chaos reigns: broken contracts, trouble with Norway over a new gas pipeline through the Baltic Sea, technical delays. Next winter could be bitterly cold for Poland.

4. Russia, meanwhile, is scraping up its reserves: After Gazprom unexpectedly prevented dividend payments at the general meeting of the state-controlled gas company at the end of June, a record sum of the equivalent of 20 billion euros is now to be distributed for the first half of the year. My colleague Mathias Brüggmann states in his commentary that Vladimir Putin is trying to plug the holes according to the “left pocket – right pocket” principle. But that is no more than a “sleight of hand that only postpones Russia’s problems instead of solving them”.

5. Little moved at Lufthansa on Friday. The union Vereinigung Cockpit (VC) had called a pilots’ strike after collective bargaining had failed. Among other things, she is demanding 5.5 percent more money this year and automatic inflation compensation from 2023. Above all, the VC is the strategy of the management around CEO Carsten Spohr a thorn in the side, more and more traffic from the core brand to subsidiaries like Eurowings relocate There, the personnel costs in the cockpit are significantly lower, it is argued. The Handelsblatt explains what exactly is being argued about – and how differently pilots earn at Lufthansa and Eurowings.

6. When Chancellor Scholz recently answered questions from the public at the Federal Government’s open day, A boy wanted to know from him: “Are you rich?” Scholz replied: “If you consider how much people earn on average, then yes.” But: When are you actually rich in Germany? It’s not that easy to find out, but we try to do it based on certain data, as the graphic shows.

7. According to Oliver Zipse, cars fueled with hydrogen are, alongside battery drives, “the last piece of the puzzle” on the way to sustainable mobility. No sooner said than done: On Wednesday, the BMW boss presented 100 test vehicles of the X5 model together with Bavaria’s Prime Minister Markus Söder. The fuel cell is a daring bet on the future, says car expert Stefan Bratzel, director of the Center of Automotive Management. “Especially when no mass manufacturer like Toyota or Volkswagen is involved.”

8. The new Volkswagen boss Oliver Blume has other plans: namely to implement a ten-point plan with which he wants to get VW back on track. In an interview, the 54-year-old explains what it should look like. Appropriately, we describe in a report how the “friendly Mr. Blume”, as some call him internally, intends to lead this beast of a group with over 100 plants on five continents, 670,000 employees and a Byzantine-style corporate governance. Among other things, with a reduced board. One thing is clear: Blume must above all solve the problems with VW’s software unit Cariad. The supplier Continental plays a decisive role in this.

9. Finally, a note on the new episode of our podcast Rethink Work. In it, I spoke to our career team leader, Lazar Backovic, about overthinking on the job. It’s about what distinguishes exaggerated brooding from sensible reflection and questioning, how to recognize warning signals and, above all, what you can do against overthinking. Have a listen! I appreciate your feedback.

I wish you a nice weekend – without circling thoughts about the job!

Best regards
Her

Kirsten Ludowig

Deputy Editor-in-Chief Handelsblatt

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