Germany issues huge new aid to soaring prices – zimo News

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The German government will release 65 billion euros to support purchasing power and is even considering taking advantage of excess profits from energy companies after tough negotiations with Olaf Schultz’s coalition.

The social democrat held marathon negotiations with his environmentalist and liberal partners until Saturday night to finalize the plan, which had been waiting for weeks.

Reiterating his slogan that Germans will “never be alone” in the face of the energy crisis, Olaf Scholz unveiled a raft of measures on Sunday, including pensions for millions An energy check of 300 euros for students and 200 euros for students.

German inflation rose again in August, reaching 7.9% for more than a year. By the end of the year, that percentage could reach 10 percent, the first time since the 1950s.

– for “speculation” –

As in other European countries, rising prices have sparked public concern, and calls for demonstrations, largely by the far right or the far left, have worried governments.

Since Russia began its invasion of Ukraine in late February, the government of Olaf Scholz has released two aid packages totaling about 30 billion euros. The announcement on Sunday was either a bazooka of nearly 100 billion euros.

The new plan has been delayed several times, illustrating nine months of friction between the three parties in the ruling coalition.

Symbol of hard compromise found: Olaf Schultz, in the words of the chancellor, works to address “speculation” in the energy market and windfall profits made by groups that “benefit” from record gas prices.

The issue has divided the government since the beginning of the summer. Ecologists and Social Democrats want a tax on the billions earned. The liberal camp, represented by Finance Minister Christian Lindner, strongly opposed it.

Berlin wants to participate in the swift implementation of emergency measures recently proposed by the European Commission, in particular aimed at capping prices for certain power producers in order to limit windfall profits for energy companies.

“For example, energy companies that produce electricity from renewable sources, coal or nuclear, whose production costs are still as low as ever, but they make a lot of money because of the current mechanism of the European energy market. Electricity,” Economy Minister Robert Habeck (Robert Habeck) explained on Sunday that action was necessary.

However, if a quick agreement cannot be reached between the 27, Olaf Schultz has pledged that he is prepared to impose such a mandatory contribution at the national level. A measure that “does not fall under the tax law”, Mr Lindner noted, being careful not to use the word “tax”.

According to the finance minister, the donation could bring in “tens of billions of euros”.

The prime minister said he was “confident” to see a chance of success for the discussions scheduled for next week at European level.

A major government fundraiser has assured that billions of dollars in aid announced on Sunday will not exceed the 2022 and 2023 budgets.

The head of the DIW, one of the country’s main economic institutions, has questioned the calculations: According to Marcel Fratzscher, the government “cannot” keep its promise to restore the constitutional rules of the debt brake that limit new debt next year.

– Reducing reliance on Russian gas –

Another measure of the aid package: the launch of a new public transport subscription at a low price of “49 to 69 euros” per month to replace the popular 9 euro ticket, a special offer that Germans can use to travel on public transport in summer.

The industry lobby group commented that the aid package for low-income households was “disappointing for the business community at a time when “more and more companies face an existential threat in the face of skyrocketing gas and electricity prices”. “. Federal BDI.

Europe’s largest economy is expected to enter a recession by the end of the year.

The specter of power outages appears to be fading as Russia’s natural gas runs dry.

“We will be able to face this winter,” assured Olaf Scholz, despite the prolonged shutdown of the Nord Stream gas pipeline linking Russia and northern Germany announced on Friday by energy company Gazprom.



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