(Natural News) Several hospitals in Germany are on the verge of bankruptcy because of the rising energy prices and inflation, according to German Health Minister Karl Lauterbach. He warned that more hospitals will soon follow unless the federal government comes up with some form of compensation.
“If we do not react quickly and really drastically, there will be closures, Lauterbach told state broadcaster ARD. “The hospitals will face a very drastic liquidity problem in the next few months.
The German Hospital Federation (DKG) complained in the past week that the financing deficit could amount to about €15 billion ($14.75 billion) in 2022 and 2023. It stated that a third of that total will go to additional energy expenses, while two-thirds will go to “non-refinanced increases in material costs” brought about by inflation.
Lauterbach dismissed that estimate, however, stating that no one can foresee how costly electricity will be in the coming year. “The hospitals are in a very special situation, but we cannot create separate special funds for each sphere,” he said.
The health chief met Finance Minister Christian Lindner on Oct. 18 to talk about the likely forms of assistance the government can give. But he didn’t make a specialized federal capital provision to help keep healthcare facilities afloat.
Yearly inflation in Germany continues to rise, growing to 10.9 percent in September based on data from the Federal Statistical Office (Destatis).
Destatis head Georg Thiel said the inflation rate has achieved “an all-time high since German reunification,” citing “enormous price rises” for energy products, including food costs, as the major reasons for the high inflation. (Related: Energy prices in Germany soar 1,000% as companies go bankrupt.)
Bad news for German hospitals
A recent study by the DKG showed that 40 percent of hospitals in the country are on the brink of bankruptcy because of the severe increase in energy prices and soaring inflation, making it impossible for clinics to maintain their operations. The study also mentioned that 60 percent of hospitals are already on financial alert.
According to the study, the shortfall in hospitals for 2023 has already reached €10 billion ($9.77 billion). Researchers determined that assistance was needed from the government to balance the dramatic increase in expenses.
DKG President Gerald Gass said in an interview with the German newspaper Nordkurier that clinics will not be able to cover increased costs, and some may be forced to close in the following months. He warned that the condition will grow worse in the coming year.
Meanwhile, the incidents of bankruptcy claims filed by companies and partnerships in Germany have soared by 34 percent to 762 percent year-on-year in September, exceeding predictions according to economic research institute IWH. The IWH also said it expected a rise of 25 percent in September.
Steffen Muller, a director at the IWH, said there will most likely be more bankruptcies in the coming months. He added that aside from the “seriously deteriorating economic situation,” bankruptcies came from a significant increase in costs of the crucial factors of production.
Although the European Central Bank’s interest rate increases lifted the financing expenses for companies, the raised average wage per hour from €10.45 ($10.28) to €12 ($11.8) as of October added new expenditures to the budgets of the firms.
The increases in energy prices connected to the ongoing Russia-Ukraine war have also negatively impacted the costs.
Follow Collapse.news for more about how inflation and the energy crisis impacted Germany.
Watch the video below to learn more about the rising inflation in the European Union.
This video is from the Russia Truth channel on Brighteon.com.
More related stories: