German Chancellor Olaf Scholz and his cabinet have led Germany into a “serious national crisis,” Markus Soeder, the prime minister of the nation’s most populous state, Bavaria, told journalists on Saturday. Berlin can now hardly find a way out of this predicament, the politician warned, adding that the government’s “budget emergency” would likely turn into another burden for ordinary Germans.
His words came as the federal government announced the lifting of energy-price controls by the end of the year. Limits on electricity and gas prices were introduced in 2022 to protect households and businesses from soaring prices of gas and electricity as Germany was actively slashing energy imports from Russia, along with many other EU nations. The measure was introduced in response to the outbreak of the conflict in Ukraine.
The brakes were to remain in place until at least March 2024, but Berlin had to change its plans after the German Constitutional Court blocked its attempt to transfer €60 billion ($66 billion) from the Covid-19 pandemic fund to other projects.
According to Soeder, the lack of funding and the corresponding budget crisis are “nothing but this government’s emergency.” Scholz and his cabinet have absolutely no policy plan and are “completely… mindless,” said the politician, who also leads Bavaria’s biggest party – the Christian Social Union (CSU). “This government has gone bankrupt,” he added.
“Basically, we have a government that is just reeling,” he told journalists on the sidelines of his party’s meeting in Nuremberg ahead of the EU parliament elections. Soeder also branded the declaration of the “budget emergency” by Berlin as a sign of the “complete helplessness” of the government coalition.
The head of Bavaria in particular criticized the federal government’s strategy of combating energy price hikes resulting from forgoing Russian energy supplies with mere subsidies. “The idea of just subsidizing electricity prices doesn’t work. A different energy policy is needed. That is the core of the problem,” he said, demanding that Berlin reverse its nuclear power plants’ phaseout in particular.
Now, removing the energy price brakes would lead to a high level of uncertainty for the economy and send electricity prices for both citizens and companies up, he warned.
Last year, Germany and the broader EU faced an energy crisis, largely caused by the loss of Russian gas imports due to Ukraine-related sanctions against Moscow. Berlin managed to substitute some of the gas it had previously bought from Russia, but high energy costs still weakened Germany’s economy and pushed up inflation. Germany fell into a technical recession in the first quarter of 2023 and demonstrated little recovery in the following two quarters.