Germany has energy crisis 'under control,' Scholz says

The German parliament starts its "general debate" on the budget for 2023 on Wednesday, with the current energy crisis in Europe likely to feature largely in discussions.

The four-hour debate in the Bundestag, the lower house of parliament, is seen as the climax of budget discussions and traditionally a forum for heated disputes about government policy between the chancellor and opposition leaders.

Proceedings opened with a virulent attack on government policy by the leader of the opposition Christian Democrats, Friedrich Merz, who accused the coalition of having neglected the chance to reform Germany in a crisis situation largely brought about by Russia's invasion of Ukraine.

Scholz: Germany to emerge stronger from energy crisis 

Chancellor Olaf Scholz countered Merz's criticism of the government's handling of the war in Ukraine, among other things highlighting the decision to break with the previous policy of not delivering weapons to conflict zones.

As an example of how his government was moving with the times, he said it was investing heavily in critical infrastructure to move Germany away from its reputed status as a digital backwater.

He accused the conservative CDU/CSU bloc of operating in an "Alice in Wonderland" world where reality stood on its head.

He also praised Tuesday's compromise on the "Bürgergeld" welfare reform as a "good solution." The reform, which is to replace the so-called Hartz IV unemployment benefit, has undergone several amendments after being blocked by the conservatives in the upper house on November 14.

Scholz also said his government was fulfilling pledges to help families, among other things by raising child benefit payments by up to €31 per month — the largest increase in the history of modern Germany.

Speaking of the current energy crisis caused in part by Russia's reduction of gas deliveries amid tensions over its invasion of Ukraine, Scholz said Germany had the crisis "under control" and that while subsidies would not completely stop energy price increases, they would help reduce them to a "bearable level."

"We are doing away with the failings of an energy and trade policy that has led us into one-sided dependence on Russia and China, in particular," the chancellor said.

He said gas storage facilities were full, liquefied natural gas (LNG) terminals were being built, new contracts were being made with non-Russian suppliers, coal-fired power plants were being restarted and nuclear power plants were continuing to operate.

Germany had the strength to master the crisis and emerge stronger from it, he added.

DW chief political correspondent Nina Haase, who was following the speech at the Bundestag, said Scholz's key message was "we've got things under control, but we do now have to work really, really hard."

She noted that Scholz had emphasized his administration's task of remedying the perceived failings of previous governments in boosting the armed forces and maintaining and improving critical infrastructure.

On the climate crisis, she said the chancellor had stressed the need for industry to employ renewable energy sources more to remain competitive in a changing world.  

'Debt brake' to be applied once more

The draft budget put forward by Germany's ruling coalition of Scholz's center-left  Social Democrats (SPD), environmentalist Greens and business-focused Free Democrats (FDP) envisions expenditure of €495.8 billion ($512.5 billion). 

Although Germany's so-called debt brake is to be reinstated in 2023 after a three-year break to cope with the economic fallout from the coronavirus pandemic, new borrowing to the tune of more than €45 billion is possible amid recession fears.

The debt brake limits government borrowing to 0.35% of the gross domestic product.

The federal budget is scheduled to go to the vote in parliament on Friday.

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tj/sms (AFP, dpa)