New Bahn head doesn’t rule out more price hikes

The new head of the state-owned railway, Deutsche Bahn, has not yet decided whether passenger ticket prices will rise this year, according to an interview published Sunday in Bild am Sonntag.

New Bahn head doesn’t rule out more price hikes
Photo: DPA

“Give me 100 days in office, then I’ll give you a binding answer,” Rüdiger Grube told the newspaper.

The controversial attempt privatise a portion of the company and sell the shares on the stock market could also come next year or the year after, Grube, who came to the Bahn after a stint at the auto maker Daimler, said.

“In light of the financial and economic crisis, an initial public offering makes no sense at this time,” Grube told Bild. “But if things are hopefully looking up in 2010 or 2011, then everything will look different.”

The company came within weeks of selling of shares last fall, only to cancel the offering at the last moment as stock markets around the world began to collapse after the failure of Lehman Brothers.

Deutsche Bahn has to reduce costs sharply, Grube said, because of the collapse in freight traffic brought about by the recession. This year, the Bahn has carried 24 percent less cargo than in 2008. Grube said the company was trying to contain administrative costs and improve efficiency and productivity in order to remain profitable through the recession.

Grube promised that during his tenure, there would be no repeat the data and spying scandals that led to the ouster of his predecessor, Hartmut Mehdorn. He also promised a full investigation into the company’s actions, which included unauthorized exams of hundreds of thousands of workers’ records and monitoring some employees’ behaviour.

“Here we will completely, unhesitatingly and absolutely clarify [the scandals],” Grube said. “I promise that the Bahn will not take similar actions under my leadership.”

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EU ministers urge unity after Germany’s energy ‘bazooka’

EU finance ministers on Monday pleaded for unity after Germany announced a €200 billion plan to help German households and businesses pay for high energy prices, amid accusations that the EU's biggest economy was acting alone.

EU ministers urge unity after Germany's energy 'bazooka'

Europe is struggling with historically high energy prices as it faces an early autumn cold snap and a coming winter almost certainly to be endured without crucial Russian gas supplies because of the war in Ukraine.

Many EU countries have announced national programmes to shield consumers from the high prices. But Germany went the furthest on Friday when it announced its mammoth plan, which will see help pouring to Germans for two years.

Arriving to talk with his eurozone counterparts, German Finance Minister Christian Lindner insisted the spending was “proportionate” to the size of Germany’s economy and said his goal was to use as little of the money as possible.

READ ALSO: Germany to spend €200 billion to cap soaring energy costs

But Germany’s largesse rankled several EU capitals, some of which feared their industries could take severe blows while Germany’s sits protected, deforming the EU’s single market.

Outgoing Italian prime minister Mario Draghi has slammed Berlin for its lack of solidarity and coordination with EU partners.

French Finance Minister Bruno Le Maire, without directly criticizing Berlin, called on partners to agree a common strategy against the price shock and for countries to refrain from going it alone.

“The more this strategy is coordinated, united, the better it is for all of us,” he said.

Risk to ‘European unity’

Others pointed to the unprecedented solidarity shown in the Covid-19 crisis in which the 27 EU nations, against all expectations, approved a jointly financed €750 billion recovery plan.

“Solidarity is not only on the German shoulders, I think this is something that we have to deliver at European level,” said EU economics affairs commissioner Paolo Gentiloni.

“We have very good examples from the previous crisis on how solidarity can react to a crisis and also reassure financial markets. I think that this is our goal,” he said.

While a Covid-style recovery plan is not in the cards for now, Le Maire said €200 billion in loans and €20 billion in aid should be devoted to REPowerEU, a programme to help countries break their dependence on Russian gas.

READ ALSO: Will Germany set a gas price cap – and how would it work?

Bruegel, a highly influential think tank in Brussels, called the German plan a spending “bazooka” that many EU countries were unable to match, creating a potential source of animosity.

“If the German gas price brake gives German business a much better chance to survive the crisis than, say, Italian business, economic divergences in the EU could be deepened, and European unity on Russia undermined,” it said in a blog.