High energy prices: DSGV President calls for emergency relief and a comprehensive energy transition in Germany

At the Annual General Meetings of the World Bank Group and the International Monetary Fund in Washington, Helmut Schleweis, the President of the German Savings Banks Association, called not only for governmental emergency relief to be provided to business enterprises and private households but also for a comprehensive and rapid energy transition In view of permanently high energy prices.  “Subsidising energy costs from public budgets will enable us to buy only limited time. This very short period will need to be used for an effective energy transition, which will sustainably make us more independent of excessively high energy prices and hence maintain the German economy’s international competitiveness”, said Schleweis. 

In his view, never before did so many fundamental transformation processes have to be managed at the same time, given the foreseeable need for a fundamental reorganisation of the world. This would push the economic substance of the German economy and of private households to the limits for years to come. The favourable pre-crisis prices of energy and raw materials would not return in the foreseeable future. However, Savings Banks were convinced that the German economy would face up to this challenge, with its strong equity base and its high degree of flexibility and innovative strength. 

All energy sources owned by Germany would need to be utilised to ease the pressure on the market by increasing supply. Sustainable savings, however, could only be achieved by means of a genuine energy transition. Powerful funding programmes should focus above all on real estate. The goal should be to double the annual rate of energy-related renovations. In addition, a much more ambitious expansion of photovoltaic systems, offshore and onshore wind power, hydrogen production at renewable energy generation sites and of the ultra-high voltage network would be required. “I would like to encourage policymakers to convince the German population not only to sacrifice prosperity in the short term but also to invest in such a comprehensive programme for the future. 

At the same time, the Savings Banks Finance Group expected that the world would enter a new phase of globalisation by being divided up into blocs of interests. The associated reorganisation of supply chains, production sites, sales channels and warehousing would be a particular challenge for Germany’s export-oriented manufacturing sector. Industrial enterprises were already increasing their inventories, broadening their supplier base by adding new suppliers and bringing back outsourced production processes into their company. “We have seen that our commercial clients have already initiated this reglobalisation process, which requires extensive economic resources", said Schleweis. 

In this difficult situation, Schleweis sees the financial sector as part of the solution. Savings Banks have practically taken advantage of the past few years without any write-downs on loans in order to transfer the funds that would have otherwise been needed for this purpose to accrue contingency reserves. And the Savings Banks Finance Group also has the substance and the strong will to finance the necessary structural changes, the reorganisation of supply chains, decarbonisation and the energy transition.