OUR Germany frantically preparing to deal effectively with a possible common power outagesas the cold winter months approach. Among other things, it is considering the possibility of responding to power outages by introducing capital control, like in Greece many years ago, with withdrawal restrictions. At the same time, Germany’s central bank, the mighty Bundesbank, is raising billions in additional capital to cover massive cash withdrawals.

Citing sources involved in the talks who spoke on condition of anonymity, Reuters said preparations have accelerated in recent weeks. Although the German authorities have publicly downplayed the risk of a blackout, the preparations betray their concern, as well as their concern that Europe’s largest economy is not paralyzed by an energy crisis. Financial industry regulator BaFin is also involved in the preparations, as are several associations of financial institutions.

The frantic preparations also reflect the scale and complexity of the side effects of the war in Ukraine on Germany, Reuters reports, as Europe’s largest economy has relied on cheap energy from Russia for decades. Today it is facing double-digit inflation and the nightmarish risk of a complete shutdown of fuel and power supplies. The parameter to all this is the German obsession with cash, because as a people they prefer security on the one hand and anonymity on the other. As a result, they still tend to use cash much more often than other Europeans, although many still keep a few German marks at home, more than 20 years after the German currency was replaced by the euro.

Indicative was their reaction when, in the first waves of the pandemic, fear pushed them to withdraw funds 20 billion euros more than they had saved during the same period. It was a record figure, but in general their preference for cash transactions is clear.

According to the Bundesbank, about 60% of daily transactions are still made in Germany in cash.

The authorities want to make sure that the country’s economy is not paralyzed due to the energy crisis.

Now the question is what happens in the event of a blackout, so various scenarios are being considered and among other things they think that if the energy crisis worsens and the largest European economy faces an energy problem, they should probably limit the amount of money that will be allowed to withdraw to every German. Meanwhile, banking regulators fear that the country’s banks are not adequately prepared for a major power outage and see the possibility as a new and unpredictable risk factor.

According to the Deutsche Kreditwirtschaft, German banks consider such an event “unlikely” but “remain in touch with the relevant ministries and departments” to jointly plan a scenario for solving the problem. He also said that in the event of a power outage, financing should be treated the same as the country’s critical infrastructure.

Meanwhile, the Bundesbank’s plans seem to run into some technical details, such as how a system involving security companies that transfer money from the central bank to ATMs and bank vaults could work.

This category includes companies such as Brinks and Loomis, which Reuters points out are not fully covered by legislation providing that telecommunications take precedence in terms of access to fuel in the event of a power outage. As the association of these companies BDGW points out, there are large gaps in the relevant legislation. Last week, the association organized a meeting with representatives of the central bank and parliamentarians to raise this issue. BDGW head Andreas Polik stressed the need to “take precautions in the event of a realistic blackout scenario, as it would be naive not to consider such an issue at this time.” According to a survey conducted last week by Funke Mediengruppe, more than 40% of Germans fear massive power outages over the next six months.