Germany growth to fall 1.2% in 2022
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Germany's economic growth is projected to be left in shambles in light of Berlin's sanctions on Russia and the ramifications it caused for all German sectors.
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Shoppers in Cologne's main shopping street Hohe Strasse in Cologne, Germany (Reuters)
Economic growth in Germany could fall to 1.4%-1.5% this year, a 1.2-1.3% decline from 2021's 2.7%, averaging some 590,000 people on reduced-hours lay-off schemes over the course of the year, Reuters quoted Labor Minister Hubertus Heil as telling Bild am Sonntag.
"We will still be growing," Heil said, adding that this was subject to war not spreading further and energy supplies remaining in place.
Heil also stressed that Berlin would provide aid and support for those impacted by the lay-offs where possible to save jobs were the situation to worsen.
The German government is planning to offer nearly $109 billion worth of aid to companies impacted by the ramifications of the war in Ukraine and the sanctions imposed on Russia, which took a toll on the global economy as a whole.
German Finance Minister Christian Linder is also planning on submitting an increase to Berlin's budget to Parliament to mitigate the impact of the war, and it is likely that this would cost the country an extra 24 billion euros.
Bosch, a major German firm, slammed Berlin over sanctions on Moscow, saying, "Anti-Russian sanctions destroy the industrial basis of Germany's economic power."
Germany's refusal of Russian gas will lead to a complete halt in production at Bosch plants, the head of the company Stefan Hartung said.
Hartung went on to explain that the company covered 20% of its energy needs with gas, and Berlin refusing Russian energy would disrupt supply chains nationwide.
The consequences of anti-Russian sanctions for the German economy may be worse than those of the coronavirus pandemic, Hartung stressed. "Germany risks anti-Russian sanctions to destroy the industrial basis of its economic power," he added.
The United States is leading a bid to abandon Russian energy, with President Biden imposing a ban on the import of Russian gas, oil, and coal, which caused energy prices in the US to surge and severely impacted the purchasing power of Americans.
The EU itself is trying to cut ties with the Russian energy industry, as Germany and many of its allies are shifting their energy policies to be less reliant on Russia even if it costs them a fortune.
However, despite condemning Moscow's actions in Ukraine, Germany has been transparent about its opposition to sanctions or political pressure that would bring about a full energy embargo, with only a few countries banning energy imports from Russia, like the United States and the United Kingdom.
