Jakarta, CNBC Indonesia – Germany is said to be happy to be in a “serious national crisis”. This was said by the prime minister of the most populous state of Bavaria, Markus Soeder, referring to the government of German Chancellor Olaf Scholz.
He said that it was now difficult for Berlin to find a way out of these difficulties. Even the politician warned of a “budget emergency”, likely to be another burden on ordinary people.
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His words came in response to the federal government’s announcement of lifting energy price controls. Previously, electricity and gas price restrictions had been implemented in 2022.
This restrictive step was taken to protect households and businesses from soaring prices. Prices increased as Germany actively reduced energy imports from Russia, in response to the outbreak of war in Ukraine.
In fact, these restrictions will remain in place until at least March 2024. However, the Scholz government had to change its plans after the German Constitutional Court blocked its attempt to transfer US$66 billion (Rp. 1,025 trillion) from unused Covid-19 pandemic funds to other projects, such as an environmentally friendly transition. .
The MK’s decision of November 15 opposed the federal government’s budgetary maneuvers to overcome the “German debt brake”. Loaded Reuters, this threw Chancellor Olaf Scholz’s coalition financial plans into disarray.
The Constitutional Court’s decision puts pressure on the current and future governments to adhere more firmly to the spirit of limiting the government’s structural budget deficit to 0.35% of gross domestic product (GDP). Even when shopping needs increase.
“The lack of funds and the budget crisis are nothing more than a government emergency… Scholz and his cabinet have absolutely no policy plans and absolutely… no thoughts,” Soeder said in a statement to journalists, quoted Russia Today (RT)
“This government is bankrupt,” said the leader of Bavaria’s largest party, the Christian Social Union (CSU).
“Basically, we have a government that is shaking,” he added on the sidelines of his party’s meeting in Nuremberg ahead of the European Union (EU) parliamentary elections.
According to him, the federal government’s strategy in combating rising energy prices due to the loss of Russian energy supplies is too focused on subsidies. He said a different energy policy was needed.
“The idea of subsidizing electricity prices alone will not work,” he said.
“Specially asking to cancel the shutdown of the nuclear power plant,” he added, providing another solution.
“Currently, removing the energy price brake will cause a high level of uncertainty for the economy and increase electricity prices for both society and companies,” explained Soeder.
Last year, Germany and the European Union faced an energy crisis, caused in large part by the loss of Russian gas imports due to Ukraine’s sanctions against Moscow. Germany has succeeded in replacing some of the gas previously purchased from Russia, but high energy costs are still weakening the German economy and driving inflation.
Germany experienced a technical recession in the first quarter (Q1) of 2023. But it has shown a slight recovery in the following two quarters.
[Gambas:Video CNBC]
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