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Germany’s Largest State Declares Emergency Amid Energy Crisis

North Rhine-Westphalia, the biggest state in Germany in terms of economy and population, has declared an emergency situation amid the energy crisis in order to be allowed to take on more debt.

North Rhine-Westphalia (NRW), home to 20 of the 50 largest German companies, declared an “extraordinary emergency situation” to be able to access more loans which would otherwise be denied to the state because of a rule on how much debt a state can borrow, German broadcaster WDR reports.

NRW has decided to borrow another $5.2 billion (5 billion euros) to cope with the energy crisis after declaring the emergency situation that allows the state to take on more loans. The state’s government is redrafting the 2023 budget and has planned to allocate $3.6 billion (3.5 billion euros) to energy relief measures from loans previously taken for Covid relief that haven’t been used.  

NRW’s regional economy has more than 700,000 small and medium-sized companies, the state said in a presentation to investors this month.

The state’s GDP slumped by 2.8% in the third quarter of 2022, the worst reading of all states in Germany, according to the Ifo institute.  

Germany’s federal government hasn’t declared an emergency situation, while only Bremen and Saxony-Anhalt – apart from North Rhine-Westphalia – have resorted to emergency situations in their 2023 state budget drafts.

With the cold weather Germany risks more emergencies this winter.

Germany may have to take drastic measures such as gas rationing if levels of gas in storage drop below 40% by February 1st next year, according to the German Federal Network Agency, which will enact such measures if necessary. If gas storage levels drop to below 40% by February 1, this would be considered a critical level, Klaus Müller, the president of the German Federal Network Agency, Bundesnetzagentur, said last week.  


Germany is currently in a stage-two level of alert and could go into a level-three emergency if gas stocks fall to critically low levels.   

By Tsvetana Paraskova for Oilprice.com

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