Whole industries in Germany could collapse due to Russian natural gas supply cuts: union chief


German Economy Minister Robert Habeck speaks to the press in Düsseldorf, Germany.Roberto Pfeil – Pool/Getty Images

  • Germany’s top trade union official said entire industries could collapse due to natural gas cuts in Russia.

  • Europe’s largest economy is heavily dependent on natural gas supplied from Russia.

  • A key gas pipeline will be closed from July 11-21 for maintenance, with fears supplies could resume after that.

Entire industries in Germany could collapse due to natural gas supply cuts from Russia, said Yasmin Fahimi, the country’s top union official.

“Entire branches of industry are in danger of collapsing permanently because of gas bottlenecks: aluminium, glass, chemical industry,” said Fahimi, the head of the German Federation of Trade Unions, in Bild am Sonntag. “Such a collapse would have massive consequences for the entire economy and jobs in Germany.”

The chemical industry, which employs around 346,000 people, is Germany’s third-largest industry, according to Germany Trade & Invest, the country’s investment promotion agency.

Germany – Europe’s largest economy – depends on natural gas piped from Russia, which accounts for 35% of its fuel imports. The industrial powerhouse imports almost all the natural gas it uses, which accounts for around a quarter of the country’s total energy mix, according to the economy ministry.

The country’s energy crisis is already pushing inflation to record highs, threatening social stability, Fahimi told Bild am Sonntag.

Russian gas giant Gazprom has already cut gas flows to Germany through the key Nord Stream 1 pipeline by 60% from last month, citing an equipment hold-up in Canada following coronavirus sanctions. war in Ukraine.

Berlin fears the situation will get worse after the planned stoppage of the gas pipeline for maintenance from July 11 to 21. German Economy Minister Robert Habeck said last week that natural gas flows may not resume after planned works, which in turn would impact fuel storage ahead of winter, when demand increases.

“We are not dealing with erratic decisions but economic warfare, completely rational and very clear,” Habeck said at an event on Saturday, Bloomberg reported.

Germany – Europe’s biggest economy – entered the second stage of its three-stage emergency gas plan last month after Russia slowed supplies to the country. If the situation worsens, the country could start rationing natural gas in the latest three-step plan, as stated by Germany’s economy ministry.

Under the country’s contingency plan, the industry would be on the front line for supply cuts. The move could devastate the economy and lead to job losses, German business leaders and unions have said.

Habeck said natural gas rationing would likely hit factories not connected to residential grids first, according to Bloomberg.

Benchmark Dutch natural gas futures have more than doubled since the start of the year.

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