Are Germany’s society and economic foundation collapsing, and does the country have the means to survive this long winter, especially when the power supplies are draining out?
The risk of a market crash or an economic downturn is increasing in Germany, and its foundations are collapsing.
In terms of manufacturing and consumer confidence, energy prices in Germany had peaked at threatening and alarming levels.
The European gas and Germany energy crisis is one of the worst in the continent’s 80-year history. with an overage of 10.1% year-over-year increase in food, energy, and service crises. That said, will the country be able to operate the same as it did before the war and the pandemic, and how will it balance its economy?
In This Video, We Will.
No one can deny that Russian energy imports were a vital element for the European economy, and by cutting them off, some countries are looking for more reliable resources to balance their energy supplies.
Inflation is persisting in making things hard on Germany and the whole world, sort of speaking. The country hasn’t seen a higher increase in food and consumer products since the days of the Weimar Republic. Experts had drawn up a list of the most anticipated worst-case scenarios; blackouts and market crashes were among the top scenarios.
Germany, one of the world’s most advanced economies in terms of manufacturing and technology, is currently closing, planning to close, or limiting its operations until further notice. Its manufacturing industry accounts for one-fifth of the total economy, which raises serious concerns among investors.
European stocks are under enormous pressure as a result of poor or ineffective government decision-making, higher interest rates, and inflation.
As stated before, the German economy relies more on the manufacturing and medical sectors, and both sectors run on a high level of power to ensure delivering the best results and maintaining a top position in the market.
The question here is whether things will get worse before they get better and to what degree the Germans must endure before they see the light or hope to get to normal price levels. In July, reports from German news stated that the giant gas company was losing an estimated $100 million daily due to the gas cuts.
The German wholesale electricity feature increased from €172 to €390 per year as of July 2022. Furthermore, the energy bills are expected to increase by 100% by the end of 2023 or even higher.
Marketers forecast that most companies’ energy costs will increase by at least a full percentage in the first half of 2023. All these indicators support a blackout scenario, especially when there are no reliable energy resources at the moment.
For a long-term scenario, it’s more likely to see a long-term power outage or even several days of an energy blackout.
The War Between Ukraine And Russia Is The Main Driver Of The High Prices.
Rising energy prices and short gas and oil supplies might cause a long-term power outage. In turn, that might cause several days of blackouts.
According to Carstenv Brzeski, a chief economist at IGN, the full impact of higher energy prices will be noticed by the end of the year. as we head into the end of the fourth quarter and, unfortunately, as the winter gets closer. The probability of a power outage increases day by day. Germany and the surrounding urban countries are in search of other natural gas and oil suppliers.
The United State Was One Of The Top Natural Gas Providers After The War.
Several European Union members, however, expressed reservations about the United State exploitation.
So what’s the solution? In such circumstances, the government might resolve the problem by making the power outage a means of leverage to balance the economy.
