Olaf Scholz fights to keep Germans on his side over Russia’s energy war

Germany’s legions of clubs and associations are the “glue holding society together”, said Thomas Schröer. How, he asked, will the government prevent them being killed off by soaring energy costs?

Schröer, 60, posed the question at a town-hall meeting in the western city of Essen last week that revealed the deep angst felt by ordinary Germans exposed to one of the worst energy crunches in their country’s history.

The man they wanted answers from was German chancellor Olaf Scholz. In power for less than three months when Russia’s full-scale invasion of Ukraine threatened Europe’s energy security, Scholz must now figure out how to keep the lights on this winter while staving off a cost of living crisis that could plunge millions into poverty.

Many of the 150 people gathered in an Essen university building asked what Scholz was doing to prevent the German people becoming collateral damage in Russia’s energy war with the west. Such concerns intensified after Moscow announced a complete halt to gas flows through the Nord Stream 1 pipeline. That pushed benchmark European gas prices up by 35 per cent when markets reopened on Monday. Both gas and German year-ahead electricity prices are trading at roughly 10 times their 2019 levels.

Responding to Schröer, Scholz acknowledged that times were tough for Germany’s 620,000 registered societies, which cater for everyone from scything enthusiasts to rabbit breeders. They were also hard for hospitals, care homes, bakeries and all small businesses. “Everyone’s worried about the next bill,” he said.

But he said Germany now had enough alternatives lined up ahead of the heating season. “Even if it’s tight, we’ll get through winter,” he said, citing higher storage levels than in 2021. “That’s a huge achievement . . . because a year ago it wouldn’t have been possible.”

A soft-spoken Social Democrat, Scholz won the September 2021 election on a modest programme of tweaks to Germany’s welfare state, a push to green the economy and a promise of more “respect” for working people.

Instead, he has become a war chancellor, seizing on the dislocation caused by Russia’s invasion to drive through far-reaching policy changes. Calling the war a “Zeitenwende”, or turning point, Scholz broke with decades of political orthodoxy by announcing a massive increase in military spending, as well as promising to send Ukraine weapons and wean Germany off its dependence on Russian energy.

Yet since then, Germany’s economic problems have mounted. With Russian gas flows declining, Scholz has been forced to search for substitute supplies while battling inflation, preventing a recession and protecting millions of hard-pressed consumers from soaring energy bills.

In a heated debate in parliament on Wednesday over who was to blame for the country’s energy crisis, opposition Christian Democrat leader Friedrich Merz accused the government of failing to think strategically by idling its remaining nuclear power stations.

Scholz blamed the “irresponsible policy” on the previous government, in particular its “decision to exit coal and nuclear energy”, which increased Germany’s reliance on Russian gas. Scholz was finance minister during the previous grand coalition between his SDP and the centre-right CDU.

On Sunday, he announced a new €65bn programme of relief measures, to be funded partly through a levy on energy companies’ windfall profits. It contains big one-off payments to pensioners and students, an expansion of housing and child allowance and higher welfare handouts, as well as modest tax cuts for the middle classes.

Scholz has also promised to revive — in one form or another — the popular summer travel scheme that allowed Germans to ride all local and regional buses, trams and trains for just €9 a month.

But the town hall in Essen, a big city in Germany’s Ruhr industrial heartland, served as a warning that some of his policies remain controversial with the wider public.

Some people appeared alarmed by the rise in defence spending, with one woman criticising the new €100bn investment fund for Germany’s armed forces. “How can you just shake that out of your sleeve . . . when there’s so little money for welfare and education and low-income families?” she asked, adding: “How will you ensure that we can get out of this militarism again? . . . How do we create a world where things are more peaceful?”

Bernhard Funke, a pensioner from the nearby city of Duisburg, took issue with the heavy weapons Germany has sent to Ukraine, saying an escalation of the war could lead to a “nuclear plant exploding” or “atomic weapons being deployed . . . isn’t the risk too great?”

The chancellor replied that if other countries behaved like Russia and tried to seize territory from their neighbours, “we’ll have 300 years of war”.

Scholz defended his support for Ukraine while insisting he would do his utmost to avoid a direct confrontation between Moscow and the west. Funke pressed his point. “Wouldn’t it be smarter to yield?” he said. Scholz countered: “What does that mean? That we abandon the Ukrainians to their fate?”

A failure to back Kyiv would, he said, have “terrible consequences”.

“Who can guarantee to us that [Russia] wouldn’t attack someone else?” he added, to widespread applause.

In his responses, Scholz showed little rhetorical flair — coming across to the audience as more policy wonk than retail politician. But some warmed to his calm, empathetic style.

“I found him very authentic,” said Petra Haberhausen, a dentist’s assistant from Bochum, a nearby city. “I’m glad we’ve got someone like him in charge.”

But others expressed disappointment at his remarks about the issue uppermost in their minds: energy. “There wasn’t enough detail,” said Otfried Priegnitz, a retired hospital manager.

Scholz said his government had pushed for the construction of new import terminals for liquefied natural gas. It was expanding renewable power, helping companies switch from gas to oil and restarting mothballed coal-fired power stations.

That was all evidence of good planning, he said: “The first thing I asked when I became chancellor was — what will happen if we don’t get more gas?”

But among the audience in Essen, big fears remain. “A lot of people — pensioners, students, people with large families — are going to be wondering if they should heat or eat this winter,” said Haberhausen. “I would never have thought such a thing was possible in Germany.”