German region declares financial emergency amid energy crisis

 The government of the German state of North Rhine-Westphalia had to declare a financial emergency amid the current energy crisis and plans to take new loans worth 5 billion euro to deal with the current economic situation, the VDR broadcaster reported.

According to the report, the region’s government needs more loans to tackle the current crisis, but had been unable to do so until recently due to a regulation that prohibits it to spend more than its budget has.

Therefore, the authorities are trying to bypass that regulation by declaring a financial emergency.

In order to justify more loans, the state authorities would refer to "extraordinary [financial] emergency," caused by the aftermath of the conflict in Ukraine.

The North Rhine-Westphalia government explains its plans for more loans by the region’s weak economic development.

"We are in a recession that would continue until 2023," the broadcaster quoted Marcus Optendrenk, the finance minister of North Rhine-Westphalia, as saying.

In his words, the region is particularly vulnerable to growing energy prices since it has lots of power-consuming industrial enterprises on its territory.

The Federal Statistical Office reported earlier that inflation in Germany accelerated stood at 10% in November against the backdrop of the energy crisis in Europe. The energy crisis in Europe worsened in early July, when there were first interruptions in gas supplies from Russia.