German steel sector: budget hole has caused ‘loss of confidence’

FRANKFURT (Reuters) -Germany’s steel sector rang the alarm bell on the country’s industrial transformation on Thursday, warning a court ruling that tore a hole in Berlin’s budget had put a question mark behind more than 40 billion euros ($44 billion) in planned investments.

“This is not about feel-good projects,” Bernhard Osburg, president of the German steel association and CEO of Thyssenkrupp (ETR:)’s steel division, told reporters, adding Germany needed to protect its future competitiveness.

Osburg said the ruling had caused a “loss of confidence” with regard to money Berlin has pledged to help transform industry towards decarbonisation, a key aspect of Chancellor Olaf Scholz’s political agenda.

Many companies had started decarbonisation projects in good faith that funding from Berlin’s budget would eventually arrive, creating major uncertainty for firms and their suppliers over the economic viability of projects.

He therefore called on Berlin to soon hold a summit with German industry leaders to provide answers on how these investments could be protected, warning that there was now an “utmost pressure to act”.

Germany’s steel sector, which apart from Thyssenkrupp also includes Salzgitter, directly employs around 80,000, while around 4 million jobs in the country indirectly depend on it. Around two-thirds of all German exports are steel-based goods.

($1 = 0.9168 euros)

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