Berlin – Katherina Reiche, Germany’s current Federal Minister for Economic Affairs, faces a daunting challenge: navigating a new energy crisis sparked by the conflict involving Iran. Just months after assuming office in May 2025, Reiche finds herself in a position she likely didn’t anticipate, tasked with managing the economic fallout of international conflict – a situation her predecessor, Robert Habeck, expertly handled during the war in Ukraine. The question now is whether Reiche can demonstrate the same level of crisis management prowess.
The situation is particularly poignant given Reiche’s initial assessment of Habeck’s performance. According to reports, she acknowledged his handling of the energy crisis following Russia’s invasion of Ukraine as a “nearly superhuman performance.” Now, she must prove she can meet a similar standard, albeit under vastly different circumstances. This isn’t simply a continuation of Habeck’s work; it’s a new, distinct crisis demanding its own solutions.
A Veteran of the Energy Sector
Reiche, 52, brings significant experience to the role. Before entering the cabinet, she served as the CEO of Westenergie, a subsidiary of the E.on energy conglomerate. Prior to that, she led the Association of Municipal Enterprises (VKU), representing numerous local utility companies. Her background as a chemist and her previous departure from politics in 2015 to take the VKU position demonstrate a deep understanding of the energy landscape.
Originally, 2026 was slated to be the year of energy policy reform under Reiche’s leadership. Her focus was to align the expansion of renewable energy sources with the capacity of Germany’s power grids. However, the escalating prices of gas and oil, coupled with the economic pressures stemming from the conflict, have shifted the priorities. Businesses and consumers alike are looking to Reiche to provide economic relief, a considerable task for any economics minister.
A Reputation for Pragmatism
Like Friedrich Merz, the leader of the Christian Democratic Union (CDU), Reiche advocates for a free-market approach to economic policy, minimizing government intervention. This philosophy initially clashed with the immediate response to the conflict, as the German government released a portion of its oil reserves and intervened in fuel pricing to mitigate the impact on consumers. Whereas seemingly at odds with her principles, Reiche ultimately announced a package of measures aimed at providing relief, acknowledging the pressure from both international partners and within the governing coalition.
Within the energy industry, Reiche is well-respected, though she faces criticism from the Green party, who derisively refer to her as “Gas-Kathi.” Her pragmatic approach often leads to disagreements within the coalition government, even within her own CDU party, as evidenced by her proposals for extending working lives. In contrast to Habeck’s frequent public appearances and engagement with the media, Reiche has maintained a relatively low public profile. However, the current crisis may necessitate a more visible and communicative approach from the minister.
Navigating a Complex Political Landscape
The current situation presents a unique set of challenges for Reiche. The speed at which energy prices are rising demands swift and decisive action. Balancing the need for economic relief with her commitment to market-based principles will be a delicate act. She must navigate the complex dynamics within the governing coalition, securing support for her policies from both the SPD and her own CDU party.
The comparison to Robert Habeck is unavoidable. Habeck’s response to the energy crisis following the invasion of Ukraine was widely praised for its decisiveness and effectiveness. Reiche now faces the pressure of not only addressing the current crisis but also demonstrating that she can manage it as skillfully as her predecessor. The stakes are high, not just for Reiche’s political future, but for the stability of the German economy.
As Germany grapples with the economic consequences of the conflict, Katherina Reiche’s leadership will be crucial. Her experience in the energy sector, combined with a pragmatic approach to economic policy, positions her to address the challenges ahead. However, her success will depend on her ability to navigate the complex political landscape and deliver tangible results for businesses and consumers. This is no longer Habeck’s crisis; it is now Reiche’s.
Looking ahead, the immediate focus will be on stabilizing energy prices and ensuring a secure supply for the coming winter. Reiche is expected to announce further measures in the coming weeks, outlining her strategy for mitigating the economic impact of the conflict. The coming months will be a critical test of her leadership and a defining moment for Germany’s energy policy.
