Author：Wall Street CN
Germany's energy predicament is worsening at a visible pace. Meanwhile, continued instability in the Middle East is driving another surge in European gas prices.The German Economy Minister publicly called for a re-examination of the country's decades-long stance on denuclearization.They acknowledged that they had no other choice regarding energy baseload supply.
German Economy Minister Katherina Reiche stated that the nuclear power phase-out policy pursued by successive governments has deprived Germany of all reliable baseload power alternatives, leaving only natural gas as an option.
Since the outbreak of the US-Iran conflictEuropean natural gas prices have risen by more than 60% cumulatively; German electricity futures prices in May were four times higher than those in France.
A consortium of Germany’s leading economic research institutions warned on Wednesday that the current energy shock will wipe out more than half of the GDP growth previously projected for 2026.The latest forecast lowers the 2026 growth rate to 0.6%, far below the 1.3% forecast in September last year; the expected growth rate for 2027 is also only 0.9%.
Chancellor Friedrich Merz characterized the policy of abandoning nuclear power as a "major strategic mistake" and pledged to end Germany's previous opposition to nuclear energy at the EU level.
Gas prices have surged by 60%, and electricity prices in Germany are four times higher than in France.
The trigger for this round of energy crisis was the market turmoil following the outbreak of conflict in the Middle East. Since the outbreak of the conflict, European natural gas prices have risen by more than 60%, causing Europe to experience its second major energy price crisis in less than five years.
The pressure on the German electricity market is particularly pronounced. According to data from the energy exchange EEX,German electricity futures prices in May were four times higher than those in France, Europe's largest nuclear power producer.This price difference vividly illustrates the significant cost differences between the two energy strategy options.
The pain of high energy prices has penetrated deep into the fabric of the German economy.
Official statistics show that in the second half of 2025, the price of natural gas for private households in Germany will be 79% higher than the level in 2021, and the price of electricity will increase by 23%.For energy-intensive industries that were already under pressure, the cost shock further squeezed profit margins.
The aftermath of abandoning nuclear power: dependence on liquefied natural gas imports
Germany’s current energy vulnerability stems from a policy transition that lasted more than a decade. In 2011, then-Chancellor Angela Merkel decided to begin phasing out nuclear power following the Fukushima nuclear disaster, a policy that was ultimately completed during the tenure of former Chancellor Olaf Scholz.
The nuclear phase-out policy has been accompanied by the large-scale promotion of renewable energy, but when wind power is insufficient and sunlight is scarce, gas-fired power plants have become the last line of defense for maintaining grid stability, causing Germany's dependence on natural gas to continue to rise.
Following the Russia-Ukraine conflict, the abrupt disruption of pipeline natural gas supplies exposed the vulnerability of Germany's energy strategy.Berlin was forced to quickly turn to liquefied natural gas imports, a large portion of which came from the United States. Currently, U.S. natural gas accounts for about 10% of Germany's total supply, and energy costs have remained high ever since.
Reiche frankly stated that natural gas is now Germany's "only remaining source of baseload supply." In her view, this structural predicament is the fundamental reason for calling for a reassessment of the stance on nuclear energy.
Economic growth forecasts have been revised downwards one after another, putting pressure on industry.
The energy shock is directly eroding Germany's growth prospects. A consortium of Germany's leading economic research institutions issued a warning this Wednesday.This energy shock will wipe out more than half of the previously expected GDP growth in 2026.
The latest forecast lowers the 2026 growth rate to 0.6%, far below the 1.3% forecast in September last year; the expected growth rate for 2027 is also only 0.9%.
This data makes the German government's recovery narrative even more difficult. Despite Berlin's launch of a €1 trillion, ten-year infrastructure and defense spending plan (the largest fiscal expansion since German reunification), growth momentum remains weak.
Reiche admitted,Energy-intensive industries are under significant pressure, but it is emphasized that there is currently no risk of supply shortages in Germany.
Embracing Nuclear Energy Again: From Opposition to "Returning to the Table"
In terms of policy stance, Germany is experiencing a subtle but noteworthy shift.
Chancellor Friedrich Merz has long characterized the policy of abandoning nuclear power as a "major strategic mistake," and while the German government has explicitly ruled out the possibility of restarting conventional reactors that have been shut down, it has instead shifted its support to research in the fields of small modular reactors (SMR) and nuclear fusion.
Merz also pledged to end Germany's previous opposition to nuclear energy at the EU level.
In an interview with the Financial Times, Reiche urged Germany not to remain isolated from the European nuclear revival process. She pointed out that France, Sweden, and Poland are all building new reactors or extending the lifespan of existing units to take advantage of nuclear energy's benefits in low-carbon, dispatchable electricity.
"You can decide you're not interested and continue using gas, becoming increasingly reliant on a single energy source; or you can rekindle your interest in technology."
