Referring to a new report from the International Monetary Fund (IMF) predicting a 0.3 percentage point contraction in Europe’s largest economy this year, Habeck said the figures were certainly inaccurate. In May, Germany’s Federal Statistical Office warned that the country was entering a recession. Some of Germany’s largest companies have begun to leave the country, raising concerns about deindustrialization.

German Economy Minister Robert Habeck. Photo: EPA

Habeck argued that the downturn could be explained by rising energy prices, a problem that Berlin feels more than other countries because of its heavy reliance on cheap Russian gas. High interest rates are also slowing global trade and investment, he said, which is particularly damaging for Germany as an export-dependent country.

“We have a big transition period between now and 2030,” Habeck said, during which Germany will move from its traditional industrial base dependent on fossil fuels to green energy such as hydrogen. “I also don’t want to ignore the fact that this process will put a burden on everyone,” he said.

Mr. Habeck supports state support in the form of electricity price caps for energy-intensive companies in international competition, so that they can withstand the challenges of the green transition, as well as have enough money to invest.

VNA

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