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European industry is undergoing a “historic transformation”: German minister



European Union

– The industrial landscape in Germany and the European Union (EU) is undergoing a “historic transformation,” Minister for Economic Affairs and Climate Action Robert Habeck said at an industry conference on Tuesday.

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Industrial companies in Europe face multiple “gigantic tasks,” he said. These include the digital transformation, the consequences of the COVID-19 pandemic, the conflict between Russia and Ukraine, the changing geopolitical environment, and demographic change.


The ongoing pandemic is still causing supply chain disruptions and material shortages around the world. If German industry had been able to process all the orders, the gross domestic product (GDP) of Europe’s largest economy would have been 1.2% higher in 2021 and even 1.5% higher after the first six months. this year, according to a study published on Monday by the Institute for Macroeconomic Policy (IMK).


Ecological transformation is another vital element of today’s changes, according to Habeck. “We want to achieve European and national climate targets with the help of an efficient and competitive industry,” Habeck stressed.

While the EU aims to become climate neutral by 2050, Germany seeks to achieve this goal five years earlier, in 2045.

“There is an urgent need to make the path to climate neutrality resilient and combine it with a growth strategy,” Siegfried Russwurm, president of the Federation of German Industries (BDI), said at Tuesday’s conference.

Last year, companies in Germany made 55 billion euros ($57 billion) worth of climate protection-related investments, according to a recent survey by state promotional bank KfW. In the coming years, however, companies will have to more than double their current investments to meet the country’s climate goals.

The private sector is off to a “good start, but more needs to happen,” KfW chief economist Fritzi Koehler-Geib said in a statement. The current energy crisis is an incentive to switch to renewable energy due to high prices. However, extreme uncertainties are an obstacle to investment plans.

After peaking in October, inflation in Germany fell back to 10 percent in November, according to preliminary figures released by the Federal Statistical Office (Destatis). Energy prices were still rising 38 percent year-on-year and were still having a “substantial impact on the inflation rate.” (1 euro = 1.04 US dollar) ■


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