A coalition of German trade associations, led by the BVMW (association of small and medium-sized enterprises) and supported by numerous organizations from the metals, logistics and recycling sectors, has issued a statement warning the German federal government that the energy and mobility cost crisis is spiraling out of control, directly threatening the future of industry in Germany.
Although the associations acknowledge government intervention, they state: “The temporary reduction in energy tax on Petrol and Diesel is an important first step towards helping SMEs, but it is by no means sufficient. Further targeted assistance measures must now be introduced quickly.”
Geopolitical tensions are increasing price volatility, which is affecting entire industrial and services value chains, according to the statement. Small and medium-sized enterprises (SMEs) are the hardest hit by this crisis. Unlike large companies, SMEs have fewer tools to protect themselves from price fluctuations and are often unable to fully pass on rising costs to customers.
'Costs are partly driven by politics'
The current crisis is not an inevitable natural disaster, according to associations. Much of the cost of energy and mobility is driven by taxes, government fees and regulations. “Simply pointing to the development of the international market is not enough,” the statement said.
The result is a sharp decline in profits and investment potential, which risks causing a decline in competitiveness and investment, the relocation of production abroad and accelerated deindustrialization of the country.
Five-point action plan
To stabilize the situation, the associations propose five specific steps:
- Cutting government spending:Permanent reduction taxes on energy, electricity and fuels to European minimums, reviewing additional costs associated with CO2 emissions, and providing targeted assistance to sectors dependent on affordable mobility.
- Protective investments:Develop existing measures to support SMEs, introduce mechanisms that effectively mitigate short-term price increases, create a robust regulatory framework for investment, and reintroduce and expand price adjustment provisions in public procurement to protect businesses from extreme price volatility raw materials.
- Securing supply: Strengthening domestic production of raw materials through expedited procedures
