The ‘energy crisis is solved’ and the German economy is safe, Bundesbank’s Nagel says
The headquarters of the European Central Bank (ECB) pictured on February 03, 2022 in Frankfurt, Germany.
Thomas Lohnes | Getty Images News | Getty Images
Germany’s energy worries are over and Europe’s largest economy has the “inherent strength” to recover from the dual shocks of the pandemic and the war in Ukraine, according to Bundesbank President Joachim Nagel.
The International Monetary Fund on Tuesday projected the German GDP will contract by 0.1% in 2023, becoming the second worst performer among major economies behind the U.K., before expanding by 1.1% in 2024.
Central to concerns about the economic outlook for Germany and the wider continent over the past year has been the potential for an energy crisis, as Europe strives to curb its reliance on Russian gas following Moscow’s full-scale invasion of Ukraine.
German output decreased by 0.4% in the fourth quarter and is expected to contract again in the first quarter of 2023, entering a technical recession.
Nagel told CNBC on the sidelines of the IMF Spring Meetings that he is “more positive than the IMF” and does not see a recession this year.
“The German economy proved a lot over the past couple of weeks and months, so the adaptation capacity of the German industry is pretty high, the energy crisis is more or less solved. So we had a really worried situation in the past, but this is now over, and the outlook is good,” he told CNBC’s Joumanna Bercetche.
He asserted that Germany’s progress in diversifying its liquefied natural gas supply away from Russia, and its increased storage — resulting from built up capacity during the mild winter — meant the country’s economy is well placed to weather the next cold season as well.
The latest available purchasing managers’ index readings showed German manufacturing, which accounts for around a fifth of the country’s economy, experienced its sharpest fall in activity for almost three years in March and hit its lowest level since May 2020.
However, Nagel claimed that this was down to lingering effects of the Covid-19 pandemic and Russia’s war in Ukraine, insisting that “we shouldn’t forget where we came from.”
“The German industry has a good capability to deal with the situation, there is this inherent strength of the German economy, and I believe they will overcome this, and they will go back to the levels we saw before the pandemic,” he said.
Sticky core inflation
The European Central Bank hiked interest rates by another 50 basis points in March to bring its main rate to 3%, as the continent continues to grapple with high inflation.
Headline inflation across the euro zone fell to 6.9% in March from 8.5% in February, driven by cooling energy costs. But core inflation — which strips away volatile food, energy, alcohol and tobacco prices — increased to an all-time high of 5.7%.
Nagel said the persistence of high core inflation showed the ECB Governing Council, in which he is considered one of the more hawkish members, has further to go in tightening monetary policy.
He expects core inflation to eventually follow the headline figure downwards, but reiterated that policymakers have to “stay really alerted when it comes to the inflation story.”
“What is also important to me, we went through some financial market turbulence uncertainty over the last five weeks and now we have to find out what was the impact out of that, and we have to wait for the incoming data until we have our next meeting in May, and then we will see,” he said.
German banking ‘very robust’
Financial markets were roiled in March by concerns about the banking sector. The collapse of U.S.-based Silicon Valley Bank early last month triggered contagion fears that eventually took down several U.S. regional lenders and led to the emergency rescue of Credit Suisse by fellow Swiss giant UBS.
The ECB went ahead with a 50 basis point hike to interest rates despite concerns about the economic impact of the banking turmoil, and Nagel hopes this sent an important message to markets.
“There is no contradiction between what we have to do on the price stability side and on the financial stability side,” he said.
“We have different instruments to tackle the price issues and the financial stability issues, so it was an important message to the financial market participants that we are very committed when it comes to fighting against inflation.”
Deutsche Bank shares sold off sharply over a few days in March after a sudden spike in the cost of insuring against its default. Analysts largely attributed this to misplaced market panic, but also to concerns about the German lender’s well-documented exposure to commercial real estate, which is considered a particularly weak link in the U.S. economy.
Nagel insisted the German banking system is safe and sound.
“I think we have to be vigilant when it comes for example to the commercial banking sector, but let me take this opportunity to say something about the German banking sector — I think the German banking sector is very robust,” he said.
“I think, compared to 15 years ago, they are much better capitalized, better liquidity situation, so I do not have doubts.”
Although he reaffirmed the ECB’s commitment to fighting inflation, Nagel acknowledged that policymakers “have to be cautious” and keep an eye on parts of the economy that may be affected if rates continue to rise.
This week on Electrek’s Wheel-E podcast, we discuss the most popular news stories from the world of electric bikes and other nontraditional electric vehicles. This time, that includes a merger between Electric Bike Company and Integral Electrics, California looking to clamp down further on Sur Ron hooligans, a Super73 recall, Cowboy’s production move, a tour inside Bafang’s factory in China, and more.
The Wheel-E podcast returns every two weeks on Electrek’s YouTube channel, Facebook, Linkedin, and Twitter.
As a reminder, we’ll have an accompanying post, like this one, on the site with an embedded link to the live stream. Head to the YouTube channel to get your questions and comments in.
After the show ends, the video will be archived on YouTube and the audio on all your favorite podcast apps:
We also have a Patreon if you want to help us to avoid more ads and invest more in our content. We have some awesome gifts for our Patreons and more coming.
Here are a few of the articles that we will discuss during the Wheel-E podcast today:
Here’s the live stream for today’s episode starting at 9:00 a.m. ET (or the video after 10:00 a.m. ET):
FTC: We use income earning auto affiliate links. More.
NIU, best known as a leader in the electric moped market, has expanded considerably over the last few years. In addition to offering a hot-selling new electric dirt bike and showing off concepts for electric ATVs, the company is now unveiling an electric microcar known as the NIUMM 500.
Still in its prototype stage, the two-seater NIUMM 500 electric microcar is designed to fit into L6e category of light quadricycles in Europe. As a quadricycle, these vehicles are technically not “cars” in the traditional sense (or in the legal sense), and thus have their own set of regulations that help streamline their path to production. Other popular microcars, such as the Citroen Ami, have taken a similar path and reached success with over 30,000 units sold.
With a target price of €8,000 (approximately US $8,300), the NIUMM 500 is intended to fill that niche role of a comfortable, weather-protected urban commuter, going beyond a typical moped or motorcycle with the advantages of locking storage and the ultimate achievement of staying dry in the rain.
In order to qualify as an L6e vehicle though, there are certain restrictions such as speed and power that prevent the NIUMM 500 from laying down the fastest lap times. A top speed of 45 km/h (28 mph) keeps the microcar city-oriented, though you could probably tell by looking that this isn’t a highway vehicle.
In some countries, light quadricycles don’t even require a full car driver’s license, instead allowing the operator to hold a more easily-obtainable moped permit.
Despite the speed limitation, the little electric microcar has a lot going for it. The traditional steering wheel control and two-pedal drive setup will feel familiar to seasoned car drivers, yet the vehicle offers a more moped-like parking experience by taking up a mere fraction of a parking spot. The narrow size helps squeeze through tight city streets, though you likely won’t be lane splitting quite like a moped.
Back on the car-like side of things, electric locks and power windows come standard (including a power rear windshield), as does electric heating. Optional add-ons include a sun roof and air conditioning. There’s a decently large storage area behind the two seats, and another small storage area in front of the passenger seat.
And in another nod to its hybrid design, halfway between a moped and a car, the NIUMM 500 can even be outfitted with removable batteries (straight from NIU’s NQiX electric mopeds). The removable battery version allows apartment dwellers or others without access to street-level parking to still own and charge their own microcar. Just like how I charge my own NIU batteries at home, owners can simply carry the batteries up the elevator and charge them in their apartment.
For those with charging access though, there’s a fixed battery version with a larger 7 kWh capacity. It gets an impressive 118 km (73 miles) of range, compared to the removable battery version’s 60 km (37 miles) of range.
Both appear to feature the same 5 kW motor with a peak output of 10 kW – also the same drivetrain from the NIU NQiX electric moped.
NIU is currently showing off the new vehicle at the Motorrad show in Dortmund, Germany.
There’s no word yet on if or when the NIUMM 500 will see production, but based on conversations with company insiders, it sounds like NIU is fairly serious about the microcar’s future.
Here’s to hoping it sees the road soon, and that they can keep that target price in check on the way there.
Electrek’s Take
Yes, I’m all in on this!
I LOVE electric microcars. Give me a tiny car, a golf cart, whatever you want to call it, and I’ll take it. For city commuters, 25 mph is often sufficient, and since many people don’t feel safe on a scooter, these types of vehicles fit the bill as lighter and more efficient alternatives to a car that still carry some benefits of a scooter or moped.
I tested out Wink Motors’ vehicles in NYC a couple of years ago and got around the city just fine with a top speed of 25 mph, so I think these could even work in the US. But of course Europe is the primary target here thanks to their more conducive quadricycle laws.
If anyone at NIU is reading this, I will travel to review!
FTC: We use income earning auto affiliate links. More.
Renewables increased their output by almost 10% and provided nearly a quarter of US electrical generation in 2024, according to newly released US Energy Information Administration (EIA) data.
Solar was still No 1
Solar remained the US’s fastest-growing source of electricity in 2024. Utility-scale and “estimated” small-scale (e.g., rooftop) solar combined increased by 26.9% in 2024 compared to the same period in 2023, according to the SUN DAY Campaign, which reviewed EIA’s “Electric Power Monthly” report data.
Utility-scale solar thermal and photovoltaic expanded by 32%, while small-scale solar increased by 15.3%. Together, solar was nearly 7% (6.91%) of total US electrical generation for the year.
In December alone, electrical generation by utility-scale solar expanded by 42% compared to December 2023.
Small-scale solar (systems <1 MW) accounted for 27.9% of all solar generation and provided 1.9% of the US electricity supply in 2024. In fact, small-scale solar PV generates over five times more electricity than utility-scale geothermal.
2024 renewables milestones
The electrical output of US wind farms in 2024 grew by 7.7% year-over-year. Wind remains the largest source of electrical generation among renewable energy sources, accounting for 10.3% of the US total.
Wind and solar combined provided more than 17.2% of US electrical generation during 2024. The mix of all renewables – wind, solar, hydropower, biomass, geothermal – provided 24.2% of total US electricity production in 2024 compared to 23.2% of electrical output a year earlier.
Between January and December, electrical generation by renewables grew by 9.6% compared to the same period the year before – nearly three times the growth rate of natural gas (3.3%) and over 10 times that of nuclear power (0.9%).
In December alone, electrical generation by renewables grew by 10.1% compared to December 2023.
Wind and solar together produced 15.9% more electricity than coal and came close to matching nuclear power’s share of total generation (17.2% vs. 17.8%).
The mix of renewables reinforced their position as the second largest source of electrical generation, behind only natural gas.
“Renewable energy sources now provide a quarter of the nation’s electricity,” said the SUN DAY Campaign’s executive director, Ken Bossong. “Consequently, the rash efforts of the Trump Administration to undermine wind, solar, and other renewables will have serious negative consequences for the nation’s electricity supply and the economy.”
Read more: Renewables provided 90% of new US capacity in 2024 – FERC
If you live in an area that has frequent natural disaster events, and are interested in making your home more resilient to power outages, consider going solar and adding a battery storage system. To make sure you find a trusted, reliable solar installer near you that offers competitive pricing, check out EnergySage, a free service that makes it easy for you to go solar. They have hundreds of pre-vetted solar installers competing for your business, ensuring you get high quality solutions and save 20-30% compared to going it alone. Plus, it’s free to use and you won’t get sales calls until you select an installer and share your phone number with them.
Your personalized solar quotes are easy to compare online and you’ll get access to unbiased Energy Advisers to help you every step of the way. Get started here. –trusted affiliate link*
FTC: We use income earning auto affiliate links. More.
-
Sports2 years ago‘Storybook stuff’: Inside the night Bryce Harper sent the Phillies to the World Series
-
Sports11 months agoStory injured on diving stop, exits Red Sox game
-
Sports1 year agoGame 1 of WS least-watched in recorded history
-
Sports2 years agoMLB Rank 2023: Ranking baseball’s top 100 players
-
Sports3 years ago
Team Europe easily wins 4th straight Laver Cup
-
Environment2 years agoJapan and South Korea have a lot at stake in a free and open South China Sea
-
Environment2 years agoGame-changing Lectric XPedition launched as affordable electric cargo bike
-
Business2 years agoBank of England’s extraordinary response to government policy is almost unthinkable | Ed Conway