Thousands of jobs at risk How a supply stop for Russian gas would affect Bonn and the region

Bonn · Russia has stopped natural gas deliveries to Poland and Bulgaria. A new study shows how a supply stop would affect the respective regions in Germany. In Bonn and the Rhein-Sieg district, more than 25,000 jobs would be at risk.

 If gas is no longer supplied from Russia, thousands of jobs in Bonn and the region would be at risk by 2023 at the latest.

If gas is no longer supplied from Russia, thousands of jobs in Bonn and the region would be at risk by 2023 at the latest.

Foto: dpa/Axel Heimken

It is a bleak scenario that the authors of a new study draw: It is April 2022, no more Russian gas arrives in the EU. The price of natural gas rises to almost double. The effects are initially only felt to a limited extent in Germany. Private households will not be rationed in accordance with the "Gas Emergency Plan". The same applies to industry for the time being. But by the turn of the year 2022/2023, the gas storage facilities will be exhausted. For the next four months, not all industrial consumers can be supplied as usual.

The study by the Leibniz Institute for Economic Research in Halle (IWH) builds on these basic assumptions and takes a closer look at the concrete effects of a gas supply stop. The authors Oliver Holtemöller, Axel Lindner and Christoph Schult evaluate how much gross value added would collapse in the individual regions of Germany and how many jobs would be endangered in each case if Russia stopped its gas deliveries. The scenario no longer seems too unrealistic. Late on Tuesday evening, Russia announced that it would no longer supply Bulgaria and Poland with gas.

Natural Gas in Germany: Up to Now 50 Percent Came from Russia

In Germany, a little more than 50 percent of the total natural gas consumed has so far come from Russia. "Increased procurement from other sources would not be sufficient to completely replace Russian supplies in the short term, and even savings among natural gas customers, triggered for example by the sharp rise in prices, would not be able to close the supply gap," the IWH study states.

However, not all regions would be equally affected by a gas supply stop: "Above all, where the manufacturing sector has a large weight, a significantly stronger slump in economic output would have to be expected," the authors explain in their study. The old federal states, especially the south, would therefore be hit harder than the east of Germany. For the question of how many jobs would be endangered by a recession, on the other hand, the level of labour productivity plays a decisive role, i.e. the labour yield per labour input.

According to the study, a halt in Russian gas deliveries would lead to a slump in Germany's gross domestic product of around two percent in 2023. Should gas from Russia continue to flow unhindered, economic experts forecast growth of around three percent. "The cumulative loss of gross value added due to the gas standstill is likely to amount to around 200 billion euros across Germany in 2022 and 2023, which corresponds to a good six percent of annual economic output," the authors of the IWH study summarise.

The manufacturing industry and the mining and energy supply sectors would be particularly affected. In regions where the manufacturing sector generates particularly high value added, namely in the car cities of Wolfsburg and Ingolstadt, value-added losses of more than eleven percent are to be expected. Losses are generally high above all in the south of Germany, relatively low in the north-east. In Bonn, the decline in gross value added would amount to 5.6 percent, in the Rhein-Sieg district to 5.9 percent. This corresponds to a loss of 1.288 billion and 879 million euros respectively, i.e. a total of more than two billion euros in Bonn and the region.

Thousands of jobs endangered by supply stop for Russian natural gas

The authors of the study also evaluated how many jobs per region would be endangered by a supply stop for Russian gas. Based on the importance of various economic sectors, they calculated for each district how many jobs would be affected by the respective loss of value added. Although the Wolfsburg and Ingolstadt locations are also strongly affected in this calculation, as is Salzgitter with a share of around nine percent. However, a particularly large number of districts with a high number of affected workers are located in North Rhine-Westphalia. "There, labour productivity is lower on average than in the south, where losses are also high in terms of value added," the study says. In Bonn, 4.8 percent, in the Rhein-Sieg district 5.7 percent of the workforce would be affected. This corresponds to 12,220 and 14,165 jobs at risk in Bonn and the region, respectively.

The study does not explain in detail how exactly jobs are endangered - whether through layoffs or measures such as short-time work. Oliver Holtemöller, deputy president of the Leibniz Institute for Economic Research in Halle, as well as co-author of the study, explains when asked: "Arithmetically, a total of 2.7 million gainfully employed people with average working hours would be lost." However, it is not possible to say more precisely for the regional level how much of this will run through the reduction of working hours, i.e. short-time work, and how much will run through the number of employed persons, i.e. dismissals or the failure to recruit new staff. "For Germany as a whole, we assume an annual average of 550,000 fewer people in employment in 2023," explains Holtemöller. The rest could be absorbed through short-time work and other measures.

Original text: Sandra Liermann

Translation: Mareike Graepel

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