German Hospitals Face Bankruptcies

By Staff, Agencies

Many hospitals in Germany may be forced into bankruptcy due to soaring energy prices and inflation, unless the federal government comes up with some form of assistance, Health Minister Karl Lauterbach said on Sunday.

“If we do not react quickly and really drastically, there will be closures,” Lauterbach told ARD broadcaster. He stopped short of assessing the scale of the potential crisis, but admitted that “the hospitals will face a very drastic liquidity problem in the next few months.”

The German Hospital Federation complained last week that the funding gap could add up to around €15 billion in 2022 and 2023, but Lauterbach brushed aside that estimate saying that nobody can predict how expensive electricity will be next year. The federation, however, said that extra energy costs account for just about a third of that sum, while the rest of it was “non-refinanced increases in material costs” due to the soaring inflation.

The health chief is set to meet finance minister Christian Lindner on Tuesday to discuss potential forms of assistance the government could provide, but has for now ruled out creating a specialized federal fund to help keep the healthcare facilities afloat.

“The hospitals are in a very special situation,” he said, but “we cannot create separate special funds for each sphere.”

The German Hospital Federation complained last week that the funding gap could add up to around €15 billion in 2022 and 2023, but Lauterbach brushed aside that estimate saying that nobody can predict how expensive electricity will be next year. The federation, however, said that extra energy costs account for just about a third of that sum, while the rest of it was “non-refinanced increases in material costs” due to the soaring inflation.

Annual inflation in Germany continues to rise by double digits, accelerating to 10.9% in September, finalized data from the Federal Statistical Office [Destatis] showed on Thursday. The inflation rate has reached “an all-time high since German reunification,” Destatis President Georg Thiel said, citing “enormous price rises” for energy products, as well as food costs, as the main reasons for the high inflation.

Leading German economists have recently warned that skyrocketing gas prices could push the EU’s largest economy into recession. They forecast that Germany will be among the countries worst affected by the global economic slowdown next year.

The EU is currently struggling with a severe energy crisis, with gas prices hitting record levels, driving up overall inflation. Russia used to cover over 40% of the EU’s gas needs prior to the start of its military operation in Ukraine and ensuing sanctions. Supplies have dropped dramatically this year, exacerbating the energy crisis as the bloc seeks to reduce its dependence on Russian energy and punish Moscow.

Germany’s energy giant EnBW AG announced on Tuesday that gas prices for households will rise again by an average 38%, starting December 1. The announcement comes around three months after the previous increase became effective.