German industry says energy reform plans threaten jobs

Sun Feb 2, 2014 11:02am EST
 

By Madeline Chambers

BERLIN (Reuters) - German industry has warned that the government's new energy plans jeopardize jobs in Europe's biggest economy, in particular a proposal to make firms that generate their own electricity pay charges to support renewable sources.

Social Democrat (SPD) Economy Minister and Vice-Chancellor Sigmar Gabriel has outlined a much-needed reform to a system of costly subsidies which has helped to fund a boom in green energy in Germany. He is now working on details.

The reform, a delicate balancing act between maintaining growth in the renewables sector and keeping heavy industry on board with affordable power, envisages cuts of up to a third in green subsidies by 2015 but also reduces support for industry.

The Federation of German Industry (BDI) said Gabriel's plans put 900,000 jobs in Germany at risk, according to Welt am Sonntag. In a letter to 900 companies, BDI chief Ulrich Grillo said the existing help given to energy-intensive firms was a condition for companies to stay in Germany.

"In this way (with an additional burden for companies), there will be a risk of companies moving away and that can lead to big job losses," Grillo wrote, according to the paper.

Industry accounts for around a quarter of Germany's export-oriented economy. Last week, ArcelorMittal (ISPA.AS: Quote), the world's biggest steelmaker, warned the energy reforms would prompt companies to scale back investments.

"PURE MADNESS"

Some members of Chancellor Angela Merkel's conservative bloc in parliament have also demanded changes in Gabriel's plans.   Continued...

 
The leader of the Social Democratic Party (SPD), German Economy Minister Sigmar Gabriel delivers a speech about his party's strategy for this year's European Parliamentary election during an extraordinary SPD party congress in Berlin January 26, 2014. REUTERS/Thomas Peter