00:00The German Chancellor, Friedrich Merz, says he plans to convene Germany's National Security Council
00:04to discuss the global energy crisis.
00:06The move comes as Merz prepares to meet Brazil's president,
00:09who has touted Brazil as a reliable energy partner.
00:13The UK is starting to sound worried.
00:15Other meetings are taking place around Europe.
00:18Oliver Crook, Bloomberg's chief Europe correspondent, joining us now.
00:21What can we expect from this meeting?
00:23How worried is Merz?
00:27I think right now what he's trying to do is give a sense of sort of stability,
00:30that things are still there, the supplies are still there in terms of refined fuels for diesel, gasoline, aviation,
00:36that sort of stuff, the things that you've just been talking about,
00:39but saying that this is a very serious situation.
00:41If it prolongs for too long, that this is going to be quite a serious situation for Germany.
00:45Obviously, Germany is probably one of the nations in Europe that is probably at least in need of another sort
00:50of energy crisis
00:51because of what we've seen in terms of the erosion of the industrial base.
00:54So he'll be convening with his National Security Council.
00:57They've already taken a couple of measures already in Germany.
00:59You have to ask, you know, really how much of an impact they will have.
01:03For example, in Germany, you're now only able to increase the price of gasoline at gas stations once a day
01:09at noon,
01:10which is apparently a measure that is supposed to help sort of contain the increase of pricing.
01:14But also he's also reduced taxes for the next two months on automotive fuel and things like that.
01:20So some of the measures that are being sort of concerned.
01:22When we think about the consequence of what these higher prices for energy are going to be,
01:26I mean, I just point to you what we saw for the PPI print out of Germany about 42 minutes
01:31ago.
01:31If you look at producer prices in Germany, what we had in February, they were down by half of one
01:37percentage point.
01:37The survey month on month for producer prices in Germany was to increase 1.4 percent.
01:42It came in at 2.5 percent increase.
01:44So you have this dynamic.
01:45You're seeing it across Europe.
01:47You're seeing it in inflation, inflation rising, growth forecast.
01:50We had a survey out on Friday for the German economy.
01:53The ambition here and the sort of goal, what we're seeing from sort of economists, is that growth figure is
01:57coming down, down, down.
01:58We were supposed to hit, what, 1.3 percent by the end of this year, of the fourth quarter.
02:04That is now down by half a percentage point, 0.8 percent.
02:06So, indeed, a lot of concern in the German economy.
02:09And we keep hearing, ever since I started sort of covering Germany, we're going to get a recovery in the
02:13back half of the year.
02:14We're going to get a recovery in the back half of the year.
02:16And every time there's a reason that that does not happen, potentially now it will be the energy crisis.
02:21And you flagged those PPI numbers, Oli.
02:23And, of course, that's just when it leaves the factory gate.
02:25And, you know, add on CPI, we'll see what kind of numbers we get on that front.
02:29Thinking about where Germany is investing right now, big push into defense and into infrastructure.
02:33And we've got a story this morning about Germany's sovereign wealth fund dropping weapons exclusions,
02:38I guess in line with lots of other pools of money, changing the rules under which it is allowed to
02:44be deployed.
02:47Yeah, absolutely.
02:48So this is the main sovereign wealth fund in Germany.
02:50And they are now basically free to invest in defense, whether it's defense stocks, whether it's defense bonds.
02:55And as you say, Anna, this has been a pretty heated debate in Europe for a very long period of
03:00time.
03:00And I think eventually now ceding towards pragmatism.
03:03I mean, this is a debate that's held at a very, very high level at the Norwegian Sovereign Wealth Fund.
03:07You know, that's almost $2 trillion.
03:08That's much more significant than this fund, which is only about $25 billion.
03:12But the Norwegians, for example, they can't invest in Airbus because Airbus makes components that go into sort of nuclear
03:18weapons.
03:19So you're seeing that sort of change.
03:20There is, though, I think, Anna, sort of irony I can't resist in this sort of story, that this is
03:25the Nuclear Waste Management Fund.
03:26This is the main fund out of Germany.
03:28And this is all part of Germans' great concern with nuclear waste, nuclear energy.
03:33And we should say they shut down all of their nuclear energy in Germany in the midst of an energy
03:39crisis.
03:39So this fund, which was derived from the great concern about sort of nuclear energy and nuclear waste, now ceding
03:45to pragmatism,
03:46when, in point of fact, when the last government was in place, they really sort of completely ignored pragmatism,
03:51were completely aligned with sort of the principle of shutting down nuclear energy in the midst of an energy crisis.
03:56And that is a consequence for which the government is still paying a high price,
04:00with now real concerns about energy production within Germany, what that will mean for inflation, and, of course, the industrial
04:05base.
04:05Thank you very much.
Comments