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Rising energy prices threaten backbone of German industry

Published : Thursday, 8 September, 2022 at 12:00 AM  Count : 223

Sept 7: More than 90% of medium-sized German companies see rising energy and raw materials prices as a major or existential threat, a survey showed on Wednesday, highlighting the growing risks for Germany's "Mittelstand" which forms the backbone of the economy.
After benefiting from cheap Russian gas for decades, industry in Europe's largest economy is facing a crunch as Russia cuts supplies, pushing energy suppliers to purchase gas at spiking market prices and pass those costs on to consumers.
In a survey by Germany's BDI industry association of 593 companies, which took place from mid-August until early September, more than a third said their existence was under threat due to rising prices, up from 23% in February.
Some 58% saw skyrocketing costs as a major challenge and almost 25% were considering or in the process of relocating part of their business. One in 10 companies had curtailed or interrupted production due to the price jumps.
The Bavarian vbw industry group on Wednesday said its energy price index had more than doubled in a year by July 2022.
"For more and more industries, energy prices are becoming an existential problem," said vbw head Bertram Brossardt.
Berlin on Sunday announced a 65-billion-euro ($64.33 billion) aid package to help citizens and companies cope with rising prices but BDI head Siegfried Russwurm said the package was not enough, calling on the government to co-finance electricity network charges. "Politicians must now take action to prevent bankruptcies and further economic and social upheaval," Russwurm said.    �Reuters

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