Germany spent €50 billion cushioning energy price shock after cutting Russian gas imports

Germany has spent some €50 billion ($58 billion) cushioning the impact of soaring energy prices after cutting Russian gas imports in 2022, Die Süddeutsche Zeitung and Bild have reported.

Following the escalation of the Ukraine conflict, Germany drastically reduced imports of Russian natural gas, which had previously covered 55% of its consumption. The shift has driven up energy costs and contributed to a prolonged economic slump, hitting both households and industry and undermining German competitiveness.

Die Süddeutsche Zeitung reported on Thursday that the Finance Ministry provided the €50 billion estimate in response to an inquiry by Green Party MP Robin Wagener. The figure covers relief and stabilization measures including electricity and gas price caps, a one-off payment to pensioners, and rescue packages for gas companies.

Bild cited several experts as saying the overall economic toll of the energy crisis, including the construction of new LNG terminals, is likely “significantly higher.”

The opposition Alternative for Germany (AfD) has repeatedly criticized Berlin’s decision to decouple from Russian energy. Party co-chair Alice Weidel said in June that “cheap energy from Russia was the secret of the success of ‘Made in Germany’.”

“The loss of this energy has set us back years. Hundreds of thousands of jobs have been lost. It has made us dependent on the United States, which sells us energy at far higher prices,” she stated.

Rising energy costs may also have contributed to the AfD’s growing popularity, according to a study published in late July. Titled ‘The Political Consequences of Energy Price Shocks,’ the paper found that “large and sudden increases in household energy costs coincided with heightened political dissatisfaction and electoral gains for populist parties, particularly the far right populist Alternative fur Deutschland (AfD).”

According to the analysis, Germans who experienced above-median price increases were 7.5 percentage points more likely to support the AfD.

The trend has been particularly pronounced in former East Germany, where “energy prices increased most strongly,” the researchers said, pointing to the AfD’s electoral gains in Thuringia, Brandenburg, and Saxony in 2023 and 2024.

On Sunday, the AfD won the regional election in Saxony-Anhalt with 43.8% of the vote, while Chancellor Friedrich Merz’s Christian Democratic Union (CDU) finished second with just 17.2%.

Multiple recent polls have indicated that the AfD is the most popular party nationally, with support at around 28%.