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These include plans by ArcelorMittal , the world's second-largest steelmaker, to spend 2.5 billion euros to decarbonise its German steel mills, efforts that depend on now-uncertain government support. "What we're seeing here is devastating for Germany as a business location globally. Besides the 6 billion euros of steel investments, other sectors potentially affected by the court ruling include 4 billion euros in the area of microelectronics and 20 billion euros for battery cell production, according to an economy ministry paper seen by Reuters. Those have previously been estimated at 68 billion euros. "Important industries in Germany, such as chemicals or steel production, need economical energy prices," Oliver Blume, CEO of Europe's top carmaker Volkswagen (VOWG_p.DE), told Frankfurter Allgemeine Zeitung.

Persons: Olaf Scholz, Robert Habeck, Christian Lindner, Reiner Blaschek, Chancellor Olaf Scholz, Stefan Rauber, Intel INTC.O, Taiwan's, Bernhard Osburg, Oliver Blume, Christoph Steitz, Tom Kaeckenhoff, Andreas Rinke, Catherine Evans Organizations: Climate, Finance, ArcelorMittal, SHS Stahl, Reuters, IMF, Intel, TW, Infineon, Steel, BASF, Wacker Chemie, Volkswagen, Frankfurter Allgemeine Zeitung, Thomson Locations: FRANKFURT, DUESSELDORF, Berlin, Germany, Asia, United States, U.S, USA, Steel Europe

☆ German budget hole puts industry at risk, steel sector warns
▼ + stars: | 2023-11-23 | by ( Christoph Steitz | ) www.reuters.com time to read: +3 min

Steel coils are waiting for delivery at the storage and distribution facility of German steel maker ThyssenKrupp in Duisburg, Germany, November 16, 2023. Bernhard Osburg, president of the German steel association and CEO of Thyssenkrupp's (TKAG.DE) steel division, the country's top steelmaker, told reporters that it was vital for Germany to protect its future competitiveness. His comments highlight major uncertainty within Germany's industrial firms, which are already struggling with local economic conditions and are increasingly looking to alternative, more favourable, markets, such as the United States. So he called on Berlin to hold a summit soon with German industry leaders to provide answers on how these investments could be protected, warning of an "utmost pressure to act". Germany's steel sector, which apart from Thyssenkrupp also includes Salzgitter (SZGG.DE), directly employs around 80,000, while around 4 million jobs indirectly depend on it.

Persons: Wolfgang Rattay, Bernhard Osburg, Osburg, Berlin, Chancellor Olaf Scholz's, Christoph Steitz, Miranda Murray Organizations: REUTERS, Thomson Locations: Duisburg, Germany, Berlin, FRANKFURT, United States, decarbonisation, Thyssenkrupp

Steel coils are waiting for delivery at the storage and distribution facility of German steel maker ThyssenKrupp in Duisburg, Germany, November 16, 2023. Scholz's three-way coalition is reeling from a court ruling last week that wiped 60 billion euros ($65 billion) from the budget at a stroke and forced it to freeze most new spending commitments, delaying talks on the 2024 budget. LOSS OF CONFIDENCEGermany's steel sector added its voice to the growing jitters, warning that the court ruling had put a question mark over more than 40 billion euros in planned investments. "I find it correct that the consequences of the constitutional court ruling ... are checked carefully," Scholz told a news conference. Scholz also described this as conceivable, participants at the meeting told Reuters, adding that the court ruling put the coalition into a difficult situation but it could be resolved.

Persons: Wolfgang Rattay, Chancellor Olaf Scholz, Robert Grundke, Bernhard Osburg, Osburg, Berlin, Scholz, Achim Post, Andreas Rinke, Christoph Steitz, Holger Hansen, Rene Wagner, Matthias Williams, Christina Fincher Organizations: REUTERS, Economic Cooperation, Development, Reuters, Scholz's Social Democrats, Thomson Locations: Duisburg, Germany, FRANKFURT, Paris, United States, decarbonisation

Underscoring the frustration, Economy Minister Robert Habeck, a member of the pro-spending Greens, called the verdict "a huge blow to industrial policy". Speaking to parliament, Habeck warned the court ruling put at risk support for the steel sector, which is counting on subsidies to decarbonise and stay competitive. Finance Minister Christian Lindner meanwhile said it was too early to discuss the consequences of the court ruling. "The steel industry alone can contribute to reducing a third of total industrial emissions - and thus has enormous leverage to save millions of tons of CO2 in the coming years." "The political bottom line is that many coalition disputes will reopen as serious budget constraints kick in.

Persons: Olaf Scholz, Christian Lindner, Robert Habeck, BERLIN, Wednesday's, Chancellor Olaf Scholz, Habeck, Yesenn, DBRS Morningstar, hawkish Lindner, Lindner, Bernhard Osburg, Carsten Brzeski, Eurointelligence, Maria Martinez, Christian Kraemer, Andreas Rinke, Markus Wacket, Tom Kaeckenhoff, Matthias Williams, Alexandra Hudson, Susan Fenton Organizations: Finance, Climate, Economy, Greens, CHANGE, Budget, European Central Bank, Thomson Locations: United States, Berlin, Germany

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