Gas embargo: According to Detlef Scheele, the consequences are not just to compensate for short

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Detlef Schele

Photo: Kay Nietfeld / dpa

The outgoing head of the Federal Employment Agency (BA), Detlef Scheele, worries about the labor market in the event of a gas embargo.

The consequences could not be offset with short-time work alone, he warned when presenting the labor market figures for April.

Scheele said that since the chemical industry would be massively affected by a gas embargo, there would be a lack of raw materials for a large number of other sectors, which could trigger a chain reaction.

This could lead to consequences on the labor market that cannot be compensated for with short-time work: »When it comes to the question of the gas embargo, I would say: I would rather not try it.

Because once it's there, you can't get it back," Scheele warned.

Scheele actually sees the labor market on a recovery course.

The prerequisite, however, is that the war in Ukraine does not escalate further and that the domestic economy is not “even more extensively” affected by price increases, supply difficulties or possibly a gas supply stop.

Despite everything, the German labor market is currently experiencing a spring upswing.

According to the BA, the number of unemployed fell by 53,000 to 2.309 million in April.

That was 462,000 fewer than a year ago.

"With the spring revival and the easing of the corona measures, the recovery on the labor market is continuing," explained Scheele.

No downturn on the labor market so far

If seasonal fluctuations are factored out, the number of unemployed fell by 13,000 in April, according to the BA.

Experts polled by the Reuters news agency had expected a drop of 15,000.

Compared to the level before the corona pandemic, seasonally adjusted unemployment is still 16,000 or one percent higher than in the pre-crisis month of March 2020.

Uncertainty about the war and a possible tightening of Western sanctions against Russia is already weighing on consumer sentiment and the business climate.

Sentiment among companies in construction has even plummeted to its lowest level since May 2010.

So far, however, there are no signs of a slowdown on the job market: the employment agencies assume that the recovery course will continue, both with regard to unemployment and employment.

"No refugee who has come now takes anyone's job away"

Detlef Schele

The crisis instrument of short-time work, which was often used in the past during the corona pandemic, is no longer so common.

According to current data on checked advertisements, short-time work was announced for 120,000 people from April 1st to 27th inclusive.

"Both the use of economic short-time work and the number of people for whom short-time work was announced" was recently declining, according to the BA monthly report.

According to KfW chief economist Fritzi Köhler-Geib, the development of unemployment and short-time work will also depend on how the corona infection process develops.

Another factor is how many people will flee from Ukraine to Germany this year and be registered with the job centers.

According to Scheele, the labor market is not currently facing any unsolvable problems with regard to immigration from Ukraine: Ultimately, it is only a matter of up to 270,000 people of working age: »These are not figures that the German labor market cannot cope with.

No refugee who has come now is taking anyone's job away."

mamk/Reuters