5 million German jobs will be lost if Russia cuts gas supply, warns major business association

The Bavarian Business Association (VBW) warned that as many as 5.6 million jobs across Germany could be lost in the case of a gas supply stop from Russia.

According to the association’s calculations, a German boycott of Russian gas could also reduce the country’s economic output by 12.7 percent, with immediate abandonment of the raw material hitting the glass, iron, and steel industries particularly hard; losses in these sectors would be almost 50 percent.

VBW highlighted that with an import rate of 89 percent, Germany is almost totally dependent on foreign supplies of natural gas. In 2021, Russia was the largest importer, with a value of 424 terawatt-hours (TWh), followed by Norway with 275, the Netherlands with 82, and Belgium with 18 TWh.

Earlier this week, Germany’s association of municipal companies (VKU) warned that the country will experience drastic energy price hikes that will drastically increase bankrupt enterprises.

“If there is no more gas coming from Russia for a short time, we will have a real problem in winter. It will be worse than the Covid-19 pandemic,” said Managing Director Ingbert Liebing.

Liebling warned that if gas flows shut down, companies will be forced to shut down either whole or in part.

A major problem for Germany remains its own lack of domestic gas production, and what gas production there is in constant decline. According to the VBW study, Germany urgently needs to open up new funding sources to be more independent from other countries in the long term. However, the discovery, development, and approval of new gas sources is a process that takes at least three years, the VBW stated.

In addition, the issue calls for a departure from the coalition agreement because it does not provide for any new permits for oil and gas drilling beyond the framework operating permits already granted for the North and Baltic seas.

Neither a permanent increase in domestic production, nor a short-term solution to compensate for the loss of Russian gas can be expected without entry into fracking technology in Germany.

To save energy, the VBW recommended decreasing room temperatures in hotels, restaurants, and private households by two degrees. According to a current draft law, the savings in electricity generation could even be enforced during a crisis if necessary. Such measures could help to prevent factories from shutting down production and harming economic output to an even greater extent.

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