Economists debate the partition of hydrogen resources.

Hydrogen splits the opinion of economic specialists

The Council of Economic Advisors delivers their economic outlook today. This is their first public representation since experiencing a discord. The rift seems unlikely to subside.

As the German Council of Economic Advisors gathers this afternoon to release their economic forecast in Berlin, the skies are bright and sunny. However, the economic landscape does not appear as rosy: Germany's economy remains sluggish with limited overall demand, as per the economic experts. "Households are still hesitant to consume, while industry and the construction sector are experiencing few new orders," said Council member Martin Werding.

The five-person council is adjusting their projections: they predict a low growth rate of just 0.2% for the current year - against the anticipated 0.7%. "These are disappointing numbers," stated Werding. Yet, Germany's economy is expected to experience a slight uptick towards the end of the year. The prediction sees Germany's economic growth reaching 0.9% in the following year. This forecast is in slight contrast to the government's view, which has slightly raised its growth estimate for Germany to 0.3% in 2024 and anticipates GDP growth of 1% in 2025.

Germany is also expected to experience a slowing down of inflation. Inflation rates are projected to decrease further from the current 2.4% to 2.1% by 2025. "We anticipate the ECB will lower its key interest rates this summer. The resultant improvement in financing conditions for businesses will bolster private investment," said Council member Ulrike Malmendier.

Apart from the German economy's state of affairs, the contentious dynamics within the Council of Economic Advisors seized much of the limelight. This is because the five members had been at odds for months. In early February, four Council members criticized their colleague Veronika Grimm for her intent to join Siemens Energy's Supervisory Board.

Grimm Joins Siemens Energy

Achim Truger, Ulrike Malmendier, Monika Schnitzer, and Martin Werding alleged that Grimm had conflicts of interest, as she could not simultaneously advise the Council while acting as a member of an energy company's Supervisory Board. Despite this, in an interview with "Capital," Veronika Grimm staunchly defended her decision and subsequently joined Siemens Energy's Supervisory Board. Thus, the presentation of the spring report was anticipated with interest; it would be the first public joining of the five economists since their public clash.

The creation of the spring report may have encountered a few bumps, with energy expert Grimm dissenting from the majority. The Council's report includes thoughts on how to make freight transport in Germany more eco-friendly. At present, most transport is carried out by road, accounting for 98% of German greenhouse gas emissions in freight transport. Shifting this to rail and water has not yet been a success.

The Council offers recommendations to push forward the electrification of road freight transport. The report asserts that battery-powered trucks are "the most mature option available, and thus likely to remain the dominant low-emission drive technology for the foreseeable future," and stressed the need to develop a charging infrastructure.

Despite this, Council member Grimm had reservations about these proposals. In her minority vote, Grimm called for promoting a variety of technology options and argued that hydrogen should also be considered for road freight transport. The dissenter seems to have caused additional turmoil in the committee.

"Just a substance-based clash"

The crux of the issue is not Grimm's minority vote but rather the fact that the hydrogen technology - which is being pursued by Siemens-Energy, a company presided over by Grimm - is a major focus of the dissenter's endeavors. Grimm sat on the board of the Centre Hydrogen.Bavaria - a group whose partners include companies like Audi, BMW, Bosch, MAN, and Siemens.

On Wednesday, Grimm dismissed potential conflicts of interest. Her colleague Truger concurred with Grimm, deeming the contention to revolve solely around content disparities. Nonetheless, those involved in the disagreement discussed this difference of opinion during the presentation. Germany is a leader in fuel cells, commented Grimm. "This position should not be compromised, and options should be kept open as much as possible."

Despite Monika Schnitzer, the Chair of the Expert Council, challenging Grimm, stating that not everything legally possible should necessarily be financed by the state, she couldn't silence the journalists present. When asked about the Council's ability to address such a delicate matter, Schnitzer remained silent. It was unexpected that the issue of road freight traffic would be the focus of the committee last summer. According to Grimm, there had been differing opinions on the subject from the beginning.

The dispute within the Council of Top Economists, both in terms of content and personalities, appears to still simmer. Schnitzer proposed implementing a code of conduct for future work within the Expert Council, but she left open the question of when a resolution might be reached.

This text initially appeared on capital.de

Discussion continues despite conflict

Schnitzer had previously been Grimm's fiercest critic when he sought a position on the Siemens Energy Supervisory Board. In an interview with the "TableMedia" portal, she famously declared, "Not everything that is legal is legitimate. She needs to decide on a mandate."

Yet, Schnitzer could not prevent further discussion on the matter with the reporters present. Grimm didn't hold back in his response, emphasizing that various perspectives had always been expected on this sensitive issue.

Although the friction within the Council of Top Economists shows no signs of abating anytime soon, Schnitzer has proclaimed the need for a code of conduct in their future work. She, however, remained ambiguous regarding a potential timeline for an agreement.

The original text can be found on capital.de