Essay by Eric Worrall
h/t observa; I’m sure those cheaper renewable energy prices will kick in. Any day now.
Billions at stake: Chancellor Merz backs European patriotism for steel
Story by Franziska Müller
Germany’s steel industry is facing an “existential crisis”, Chancellor Friedrich Merz warned, as he signalled a shift toward greater economic self-reliance in Europe. He spoke alongside Finance Minister Lars Klingbeil following a summit at the Chancellery on Thursday, convened to find ways to secure the sector’s future.
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€50 billion at risk
Steelmaking in Germany is heavily dependent on high temperatures, making it particularly vulnerable to soaring energy prices. As a result, German steel has become increasingly uncompetitive compared with imports.
In the worst-case scenario, the country could lose its status as an industrial powerhouse, with companies moving production abroad. A study by the University of Mannheim, commissioned by the Hans Böckler Foundation, warned that such a shift could cost the German economy up to €50bn a year in lost value added.
The researchers estimated that at least 30,000 jobs could be lost if domestic production were to collapse. They said key sectors such as metal manufacturing, mechanical and electrical engineering, and the automotive industry would face sharply higher costs if forced to rely on imported steel.
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Read more: https://www.msn.com/en-au/money/news/billions-at-stake-chancellor-merz-backs-european-patriotism-for-steel/ar-AA1PYDk9
The economic illiteracy of this government proposal in my opinion demonstrates why the German economy has been slipping so badly over the last few decades.
Imposing higher tariffs without addressing underlying economic problems such as high energy prices, as President Trump is doing in the USA, will not save German industry, it just shifts the pain downstream onto German end use manufacturers. In an economy as dependent on exports as Germany, this absurd steel patriotism proposal is a recipe for capital flight and economic ruin.
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