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Germany is preparing for a rough winter of sky-high energy costs
The German government is setting aside 5% of its annual GDP to help the country get through what promises to be a tough winter — as energy prices climb to unprecedented2 levels.
A MARTINEZ, HOST:
The German government is setting aside 5% of its annual GDP to help the country get through what promises to be a tough winter, as energy prices are expected to climb to unprecedented levels. Particularly vulnerable is German industry, the backbone3 of the country's economy. NPR's Rob Schmitz reports from the factory floor.
ROB SCHMITZ, BYLINE4: It's metal as far as the eye can see at the Thoma Metal refinery5 in rural Bavaria. In one corner, there's a box full of nuts and bolts the size of baseball bats ready to be shipped to Dubai to build a skyscraper6, and in another, polished stainless-steel tubes that'll be used inside a commercial jet. Andrea Thoma-Bock oversees7 all of this.
ANDREA THOMA-BOCK: (Through interpreter) We finish every type of metal. When you turn the taps in the bathroom in the morning, you're touching8 our work. When you get in your car, when you board a plane - people don't know us, but they use our products on a daily basis.
SCHMITZ: The same could be said for the thousands of Germany's so-called Mittelstand companies, small- to medium-sized privately9 owned family firms that make up the backbone of Europe's largest economy. And Thoma-Bock says they're in real danger.
THOMA-BOCK: (Through interpreter) We're an energy-intensive business. But with the war in Ukraine, things have reached another dimension. Our electricity prices have gone up by a factor of more than 10. We used to pay 4 cents a kilowatt10 hour. Now we're paying 57 cents.
SCHMITZ: Thoma-Bock's company, which has been in her family for nearly a century, is spending $3 million more on energy this year than it did last year. And this, she fears, is just the beginning.
THOMA-BOCK: (Through interpreter) Everyone is dreading11 the last day of this year, when a lot of energy contracts for businesses will run out. There are businesses who have contracts for next year. But for the rest of us, the prices are going to be astronomical12. This is how businesses shut down.
SCHMITZ: Disruptions in the flow of natural gas from Russia, now made permanent by explosions that ripped apart two pipelines13 that connect Germany to Russia, have pushed up prices to record levels. Inflation in the country hit a 70-year high of nearly 11% in September.
MARCEL FRATZSCHER: In many ways, it's a problem because companies don't know whether they can actually pass on higher costs to consumers and other companies that demand their products.
SCHMITZ: Marcel Fratzscher, president of the German Institute for Economic Research, says Germany's Mittelstand companies, whose quality have assured them a competitive position on the global market, will soon be undercut on price.
FRATZSCHER: Energy prices, gas prices have increased for European and for German companies a lot more than for American or Chinese or Korean or Japanese companies. And that is a big challenge particular for such an open economy as Germany, which relies a lot on trade and competition in global markets.
SCHMITZ: But according to a business survey conducted by economist14 Andreas Peichl, more than half of German Mittelstand companies should be able to pass on higher costs to their customers simply because they produce specialized15 products that few other global companies produce, essentially16 cornering the market for these goods.
ANDREAS PEICHL: And of course, if they have market power, then maybe this is easier to do so. And so there will be some firms who won't survive this. But then, maybe that's part of the market economy.
SCHMITZ: Back on the factory floor, Andrea Thoma-Bock isn't so confident.
THOMA-BOCK: (Through interpreter) At some point, nobody is going to be interested in the products we export because they'll be too expensive. Politicians have had a year to watch this, yet they seem blind to this.
SCHMITZ: Last week, Germany's government announced it'll set aside at least 200 billion, 5% of its GDP, to help limit rising energy prices. But they haven't yet worked out how they'll do that.
Rob Schmitz, NPR News, Bavaria.
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1 transcript | |
n.抄本,誊本,副本,肄业证书 | |
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2 unprecedented | |
adj.无前例的,新奇的 | |
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3 backbone | |
n.脊骨,脊柱,骨干;刚毅,骨气 | |
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4 byline | |
n.署名;v.署名 | |
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5 refinery | |
n.精炼厂,提炼厂 | |
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6 skyscraper | |
n.摩天大楼 | |
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7 oversees | |
v.监督,监视( oversee的第三人称单数 ) | |
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8 touching | |
adj.动人的,使人感伤的 | |
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9 privately | |
adv.以私人的身份,悄悄地,私下地 | |
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10 kilowatt | |
n.千瓦 | |
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11 dreading | |
v.害怕,恐惧,担心( dread的现在分词 ) | |
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12 astronomical | |
adj.天文学的,(数字)极大的 | |
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13 pipelines | |
管道( pipeline的名词复数 ); 输油管道; 在考虑(或规划、准备) 中; 在酿中 | |
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14 economist | |
n.经济学家,经济专家,节俭的人 | |
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15 specialized | |
adj.专门的,专业化的 | |
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16 essentially | |
adv.本质上,实质上,基本上 | |
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