Consequence of high energy costs: DIW boss: My biggest concern are personal bankruptcies

The President of the German Institute for Economic Research, Marcel Fratzscher, assumes that many people will no longer be able to pay their electricity and gas bills in the future.

Consequence of high energy costs: DIW boss: My biggest concern are personal bankruptcies

The President of the German Institute for Economic Research, Marcel Fratzscher, assumes that many people will no longer be able to pay their electricity and gas bills in the future. In his estimation, the federal government must drastically increase the current aid.

The economic expert Marcel Fratzscher sees the population, economy and politics in Germany as difficult years ago as a result of the energy crisis. "We talk a lot about corporate insolvencies, but my biggest concern is personal insolvency," said the President of the German Institute for Economic Research (DIW), according to the editorial network Germany. Many people will no longer be able to pay their electricity and gas bills in the future. "The federal government will have to double or even triple the current aid over the next six months."

Fratzscher expects a fundamental upheaval in the corporate world. "The bitter truth is that we will experience a huge structural change in the German economy," said the economist. "Many energy-intensive companies will not survive." The country must prepare for permanently higher costs for gas and other fossil fuels. "This will continue until we have made the switch to renewable energy sufficiently."

For the economy, the DIW boss predicted a long phase of economic weakness and inflation. "My concern is not so much that we will shrink in the next two quarters, but that there will be no recovery afterwards either," said Fratzscher. "We expect the economy to shrink for 2023 as a whole, and 2024 won't be such a good year either," he said. "We will have to adjust to a few years of stagflation."