BERLIN (Realist English). Germany’s new economy minister Katherina Reiche has issued a stark warning that the survival of Germany’s heavy industry is vital not only to national recovery but to the strategic sovereignty of Europe. In her first international media interview since joining Chancellor Friedrich Merz’s cabinet, Reiche urged the European Commission to approve a subsidy plan that would cut electricity costs for energy-intensive sectors such as steel and chemicals.
“Not having steel production in Germany would mean entering into new dependencies,” Reiche told the Financial Times. “To no longer have basic chemical production would mean entering into new dependencies.” Her remarks come as Berlin scrambles to end the country’s longest postwar stagnation while simultaneously preparing a €1 trillion investment program in infrastructure and defense.
Reiche, a former CEO of Westenergie and long-time CDU lawmaker, emphasized that Berlin is “doing its homework” through structural reforms, but warned that heavy industry must not be neglected. The exit from nuclear power, combined with the energy crisis triggered by Russia’s 2022 invasion of Ukraine, has left German manufacturers facing soaring energy bills, increasing competitive pressure from China, and acute labor shortages.
To address this, the Merz government has pledged to reduce electricity costs by at least five euro cents per kilowatt-hour through tax cuts and grid fee reductions. A special industrial electricity rate is also on the table for sectors such as steel, glass, cement, and chemicals — pending state aid approval from Brussels.
“This is essential to keep energy-intensive industries in Germany,” Reiche said, adding that the EU’s carbon cost compensation mechanism must also be extended.
She argued that supporting Germany’s industrial base is not only about economics, but about safeguarding European democracy. “We are in a global competition between systems,” she said. “Europe must show that it can act quickly — improve, adapt, and do so without compromising democratic values.”
The stakes are high. Germany, the eurozone’s largest economy, has suffered three years of near-zero growth. Now, with Donald Trump threatening 50% tariffs on EU goods and global demand softening, recession risks are mounting. Brussels’ approval of Berlin’s subsidy plans — which may test EU rules on state aid — could become a decisive factor.
Reiche also signaled a more pragmatic approach toward European energy cooperation, moving away from the previous government’s hard line against nuclear power. She voiced openness to partnering with France on nuclear fusion, which does not produce long-term radioactive waste.
On China, Reiche called for a dual-track strategy: reducing dependencies on Chinese inputs while maintaining stable trade relations. “Our companies are deeply invested there. A lot of added value comes from China,” she said — but cautioned against overexposure to geopolitical risk.
Addressing calls from within her own party to revive Nord Stream, Reiche was blunt: “Back to Russian gas? With a regime bombing Kyiv daily? Absolutely inconceivable.” Instead, she called for a diversification of energy supplies and admitted that Germany had paid “a bitter price” for its previous reliance on Moscow.
Reflecting on her own roots in East Germany, Reiche acknowledged the economic dislocation still felt in the region — a dynamic the far-right Alternative for Germany (AfD) has capitalized on. “This region is undergoing permanent structural change,” she said. “There is a fear of losing prosperity, a sense that nothing is ever truly stable.”
Reiche’s candid message is a rare blend of strategic realism and political urgency. Her economic nationalism — framed within a European democratic vision — repositions Berlin not as a cautious administrator, but as a proactive force demanding industrial resilience. Whether Brussels agrees may determine the industrial map of Europe for decades to come.
