By the end of this week, the school holidays end in 11 of Germany’s 16 federal states. For readers from abroad, here’s a layman’s take on the political mood in Germany as the summer lull draws to a close. [1/9]
Two issues are on most people’s mind. First, the massive rise in energy prices, mainly caused by curbed gas supplies from Russia – @JamesEagle17 has aptly illustrated the consequences on German households (on LinkedIn, linkedin.com/posts/jameseag…). [2/9]
For now, there’s just an eerie feeling that something is wrong. The water in public swimming pools is colder (nytimes.com/2022/07/29/wor…) and politicians are asking people to use wash cloths. But most will only feel the hit to their disposable income in a couple of months. [3/9]
Second, it’s visible to everyone that Germany is facing the worst drought on record. The river Rhine has dried up (p.dw.com/p/4FeaH), lush gardens are turning into steppes, and it is becoming increasingly difficult to ignore the consequences of climate change. [4/9]
According to the latest #Politbarometer poll, 40 percent of respondents expect their own economic situation to worsen in the coming year – this is apparently the highest proportion of pessimistic responses since this monthly survey began in 1977 (zdf.de/nachrichten/po…). [5/9]
So how should policymakers react? 71% of respondents to the #politbarometer survey want Germany to continue to support Ukraine, even if this entails income losses due to high energy prices. This view is shared across the political spectrum, except for AfD supporters. [6/9]
Instead of bowing to Russia, 93% of respondents want a faster expansion of renewables and 65% want to continue using nuclear power plants beyond their planned closure. The shift in sentiment towards nuclear is shared by many Green Party supporters (spiegel.de/international/…). [7/9]
The Greens now enjoy record support for their handling of the gas crisis and their policies against the climate crisis, while support for the liberal @fdp has dropped, b/c it is seen as less competent and as an obstacle to fair burden sharing. [8/9]
In summary, most Germans see a recession coming b/c of high energy prices (), but polls show that they’re willing to take it on the chin rather than give in to Russia. Germany also want a faster green transition in response to the climate crisis. [9/9]

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More from @ChristianKopf

Mar 21
Should the EU curtail payments on fossil fuel imports from Russia? And are tariffs the best instrument? Within Germany, the tone of this debate is shifting. (1/11)
The issues are laid out in a 🇩🇪 🧵 by @GrimmVeronika, member of the German Council of Economic Experts . Leading journalists are calling for action: Gerald Braunberger (@faznet) and @MarcBeise (@sz) . (2/11)
It's difficult to quantify the effects of a disruption of Russian energy supplies on 🇩🇪. The real model w/o amplification effects by @BachmannRudi et al may not be ideal (). But even after OPEC embargo or Gulf War I 🇩🇪 GDP contracted by less than 2%. (3/11)
Read 12 tweets
Mar 20
This 🧵discusses the findings of a recent policy brief by @BachmannRudi, @DBaqaee, @kuhnmo, @ben_moll, @MSchularick and others (quoted as BKMS) 👇on the effect of a stop of energy imports from Russia on the German economy. (1/14)
The analysis presented in this paper has been lauded by @paulkrugman (nytimes.com/2022/03/15/opi…) and has even inspired an online petition by an anonymous group (). (2/14)
In the BKMS model, output (Y) is a function of brown energy supply (E) and other inputs (X), and the effects of a change in brown energy supply depends only on the share of energy consumption (α) and on the elasticity of substitution between energy and other inputs (σ). (3/14)
Read 14 tweets
Mar 13
In an article for @zeitonline, leading Germany economist @MFratzscher – typically a voice of reason – argues against a gas embargo because "Russia currently does not receive our payments for gas imports anyway, as they are in euros or US dollars". Is this view correct? [1/10]
I have no inside knowledge on this matter, but publicly available information paints the following picture: If you fill up your tank at a random petrol station in Berlin, there's a 9 in 10 chance that the diesel is supplied by the PCK refinery in Schwedt. [2/10]
PCK refinery is majority-owned by Rosneft Germany (pck.de/en/company#our…), and it is not subject to sanctions (rbb24.de/politik/thema/…). [3/10]
Read 11 tweets
Mar 13
What would be the impact of an embargo on Russian exports? Which goods is Russia buying with its export revenues? And which countries are supplying those goods? [1/n]
We know from @OECtoday that Russia is mainly exporting mineral products (60% of total exports) and metals (10% of total exports), and is importing almost all industrial goods oec.world/en/profile/cou… [2/n]
Russia's largest imports are machines such as computers, turbines, engine parts (28% of total), transportation equipment such as cars or vehicle parts (14% of total) and chemical products such as medicine (14% of total). [3/n]
Read 6 tweets

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