German union warns entire industries could collapse
A German union official warns of permanent collapse in aluminium, glass and chemicals due to the cut in Russian gas. Germany posted its first trade deficit in 31 years.
English · Original discussion in Spanish · Published
German unions warn of an unprecedented industrial collapse
The warning does not come from a hotheaded pundit or a hasty Twitter user. The German union official said it before sitting down with Chancellor Olaf Scholz: «Because of the gas bottlenecks, entire industries are in danger of collapsing permanently: aluminium, glass, the chemical industry». The quote, picked up by Bloomberg on 3 July 2022, puts in black and white what many had been pointing out for months: the cut in Russian gas cannot be replaced with a snap of the fingers or with solar panels.
What is striking is not the warning. What is striking is who signs it. A German union, an actor that in Spain usually appears in photos with a raised fist and the official message under its arm, has come out to say that the European locomotive is going to the dogs. And it said it in public, before a meeting with the head of government.
What exactly the German union warning says
The message is surgical. It does not speak of a «slowdown» or «temporary adjustments». It speaks of permanent collapse. Three specific sectors: aluminium, glass and chemicals. They are the foundation of the German industrial chain. If those three fall, they drag down the automotive industry, construction and half the Mittelstand.
The warning comes in a context where Germany is already piling up uncomfortable signals. The country posted its first trade deficit in 31 years, a figure that shatters the narrative of the invincible exporting power. And Nord Stream, the artery that carries Russian gas directly to Germany, faces an eleven-day maintenance shutdown in July that nobody can guarantee is just that.
Some argue that the problem is not the supplier, but having built a voluntary dependence on a single supplier over two decades. Others reply that the supplier honoured its contracts until Europe began rejecting its terms. The practical result is the same: German industry looks to winter with panic.
The calculation that dismantles the official narrative
The numbers circulating among those affected are stubborn. A middle-class family in northern Bavaria paid 900 euros for heating fuel in 2021. In 2022, the same bill rose to 2,500 euros. The immediate consequence: they cancelled their holiday alucinación. It is not a tragedy, it is an adjustment. But multiplied by millions of households, it is a contraction in consumption that no economy can withstand.
In Spain, the same pattern. One user reports having paid 130 euros for gas in May and June without turning on the heating, when the previous year's bill was under 30 euros. The projection for winter: around 1,000 euros for every two months.
The full calculation, itemised line by line, shows a difference that surprises even those who had already braced for the worst. The German income pyramid has its base and its middle in wage earners who cannot absorb that blow without cutting consumption. And consumption is 50% of German GDP.
Why Germany cannot simply back down
Here lies the crux of the matter. Germany cannot back down without admitting it was wrong. For months it has been overacting at the G7, in the headlines and in the giggling photo ops. Buying Russian gas again at the previous price would be a first-rate international humiliation.
But it cannot hold out either. The country has been militarily occupied by the United States since 1945. Its dependence on Washington is total in defence matters. And Washington has an interest in Russian gas not flowing to Europe. The trap is perfect: Germany sanctions its own energy supplier to please its military protector, and its industry pays the bill.
Chancellor Scholz tries not to sink the country, but he governs with a coalition of red-greens, liberals and conservatives where each partner has its own agenda. Finding a sensible voice in that chorus is difficult. The unions, at least, have stopped keeping quiet.
The opportunity Spain will not seize
Spain has Algerian gas, a mild climate, first-rate infrastructure and an enviable strategic position. With a halfway decent government, it could be selling processed gas to Europe and attracting German industry desperately seeking competitive energy costs.
The window is real. Central Europe's energy problem will not be fixed in months, but in a decade. Germany is in deep trouble. For the first time in 31 years, its trade balance is in deficit. That means its industry is buying more than it sells, and the bleeding may accelerate.
Spain, however, will end up giving away whatever it has and going hungry like the worst of them. Applauding at 8 p.m. from the balconies of misery. The opportunity is there. Seizing it requires something more than solar panels and good wishes.
The hedged prediction: if Nord Stream does not return to full capacity after the July maintenance, the German industrial collapse will stop being a union warning and become a quarterly statistic. By then, the unions will already have said what they had to say. And no one will be able to claim they were not warned.
The warning does not come from a hotheaded pundit or a hasty Twitter user. The German union official said it before sitting down with Chancellor Olaf Scholz: «Because of the gas bottlenecks, entire industries are in danger of collapsing permanently: aluminium, glass, the chemical industry». The quote, picked up by Bloomberg on 3 July 2022, puts in black and white what many had been pointing out for months: the cut in Russian gas cannot be replaced with a snap of the fingers or with solar panels.
What is striking is not the warning. What is striking is who signs it. A German union, an actor that in Spain usually appears in photos with a raised fist and the official message under its arm, has come out to say that the European locomotive is going to the dogs. And it said it in public, before a meeting with the head of government.
What exactly the German union warning says
The message is surgical. It does not speak of a «slowdown» or «temporary adjustments». It speaks of permanent collapse. Three specific sectors: aluminium, glass and chemicals. They are the foundation of the German industrial chain. If those three fall, they drag down the automotive industry, construction and half the Mittelstand.
The warning comes in a context where Germany is already piling up uncomfortable signals. The country posted its first trade deficit in 31 years, a figure that shatters the narrative of the invincible exporting power. And Nord Stream, the artery that carries Russian gas directly to Germany, faces an eleven-day maintenance shutdown in July that nobody can guarantee is just that.
Some argue that the problem is not the supplier, but having built a voluntary dependence on a single supplier over two decades. Others reply that the supplier honoured its contracts until Europe began rejecting its terms. The practical result is the same: German industry looks to winter with panic.
The calculation that dismantles the official narrative
The numbers circulating among those affected are stubborn. A middle-class family in northern Bavaria paid 900 euros for heating fuel in 2021. In 2022, the same bill rose to 2,500 euros. The immediate consequence: they cancelled their holiday alucinación. It is not a tragedy, it is an adjustment. But multiplied by millions of households, it is a contraction in consumption that no economy can withstand.
In Spain, the same pattern. One user reports having paid 130 euros for gas in May and June without turning on the heating, when the previous year's bill was under 30 euros. The projection for winter: around 1,000 euros for every two months.
The full calculation, itemised line by line, shows a difference that surprises even those who had already braced for the worst. The German income pyramid has its base and its middle in wage earners who cannot absorb that blow without cutting consumption. And consumption is 50% of German GDP.
Why Germany cannot simply back down
Here lies the crux of the matter. Germany cannot back down without admitting it was wrong. For months it has been overacting at the G7, in the headlines and in the giggling photo ops. Buying Russian gas again at the previous price would be a first-rate international humiliation.
But it cannot hold out either. The country has been militarily occupied by the United States since 1945. Its dependence on Washington is total in defence matters. And Washington has an interest in Russian gas not flowing to Europe. The trap is perfect: Germany sanctions its own energy supplier to please its military protector, and its industry pays the bill.
Chancellor Scholz tries not to sink the country, but he governs with a coalition of red-greens, liberals and conservatives where each partner has its own agenda. Finding a sensible voice in that chorus is difficult. The unions, at least, have stopped keeping quiet.
The opportunity Spain will not seize
Spain has Algerian gas, a mild climate, first-rate infrastructure and an enviable strategic position. With a halfway decent government, it could be selling processed gas to Europe and attracting German industry desperately seeking competitive energy costs.
The window is real. Central Europe's energy problem will not be fixed in months, but in a decade. Germany is in deep trouble. For the first time in 31 years, its trade balance is in deficit. That means its industry is buying more than it sells, and the bleeding may accelerate.
Spain, however, will end up giving away whatever it has and going hungry like the worst of them. Applauding at 8 p.m. from the balconies of misery. The opportunity is there. Seizing it requires something more than solar panels and good wishes.
The hedged prediction: if Nord Stream does not return to full capacity after the July maintenance, the German industrial collapse will stop being a union warning and become a quarterly statistic. By then, the unions will already have said what they had to say. And no one will be able to claim they were not warned.
Summary of a discussion on Burbuja.info - Foro de economía, actualidad y política., translated from Spanish and reviewed before publication. Read the full discussion (99 replies).
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