Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Germany unveils €65B in energy cost relief, vows to cap prices

Germany unveils €65B in energy cost relief, vows to cap prices

Chancellor Scholz says package includes plans to collect excess profits from some energy producers.

The German government on Sunday announced a €65 billion relief package to cushion citizens and companies from skyrocketing energy costs while also vowing to reform the energy market to collect excess profits and cap prices.

"We will get through this winter," Chancellor Olaf Scholz said during a press conference as he announced various support measures as well as an extension of Germany's hugely popular state-subsidized €9 transport ticket.

Crucially, Scholz also said that his government would crack down on energy providers that are making excess profits amid the high energy prices that have been largely caused by Russia's war against Ukraine as well as Moscow's reduction of gas exports to Europe.

"There are excess profits by some producers who can simply take advantage of the situation that the very expensive price of gas determines the price of electricity, and that therefore make a lot of money," the Social Democratic chancellor told reporters. "We are firmly determined to change the market rules in such a way that such windfall profits no longer occur, or that they are skimmed off."

While gas is only partly used in Germany to produce energy, the current market design has caused the high gas prices to jack up general energy prices, meaning that providers who produce energy from other sources such as wind, solar or coal are making huge profits.

Scholz said that "the many, many billions" of excess profits that the state would collect from such energy providers would be used to finance relief measures and introduce "a price cap for those in the electricity market who do not have to pay the high gas prices." The European Commission is already working on plans to propose such a price cap at the European level.

Scholz's Finance Minister Christian Lindner, from the liberal Free Democratic Party (FDP), had previously raised opposition toward introducing an excess-profit tax in Germany; such a tax already has been announced in the U.K. and Italy. On Sunday, Lindner — speaking next to the chancellor in Berlin — backed the proposed measures, stressing that this was not a tax in the classical sense but rather an intervention in the framework of energy market rules.

Scholz said his government would seek to implement the energy price cap in accordance with European rules, if they could be quickly agreed by EU countries, "or by implementing them on a national level."

Relief for students and pensioners

When it comes to the relief measures for citizens, Scholz said that pensioners would receive a €300 easing and students €200. He also vowed to extend state-paid housing allowances from the current total of 700,000 recipients to about 2 million recipients. The new relief package, which comes on top of two previous packages that together amounted to €30 billion, also cuts social security contributions for people with a monthly income below €2,000 and increases child allowances.

Another cornerstone of the package is a permanent extension of the €9 transport ticket, which had allowed citizens this summer to travel for one month on all buses, trams, metros and regional trains nationwide, but expired at the end of August. Although Germany's 16 federal states still need to agree to their share of the financing, the price of the new monthly ticket will probably be between €49 and €69.

"It is a matter of negotiation between the federal government and the states," said Omid Nouripour, the co-leader of the Green party, which rules in a coalition with Scholz's Social Democrats and Lindner's FDP. "We hope that we will very soon be able to agree on a Germany ticket with a price around €49," Nouripour added.

A cornerstone of the package is a permanent extension of the €9 transport ticket which had expired at the end of August

Germany's main industry lobby BDI criticized the relief package, saying it had "significant shortcomings and gaps" because it largely focused on private households and was offering too little support for companies that are also suffering from high energy prices.

"The industry expects the government to better include the interests and practical needs of companies in its ongoing crisis management," BDI President Siegfried Russwurm said in a statement.

The full paper detailing the German relief measures, which were agreed on by the three coalition parties overnight.


Related Articles

Budapest Post
Venezuela Steps Up Claim on Guyana's Essequibo Region
Spain's First AI Model Earns Up to $10,000 Monthly
German Cabinet Works to Address 'No-Debt' Crisis After Court Outlaws Budget
Former President Restricted from Leaving Ukraine Amid Alleged Plan to Meet Hungary's Viktor Orban
Spain soccer kiss: Furore grows as prosecutors launch probe against federation chief
Paper straws found to contain long-lasting and potentially toxic chemicals - study
FTX's Bankman-Fried headed for jail after judge revokes bail
Blackrock gets half a trillion dollar deal to rebuild Ukraine
Steve Jobs' Son Launches Venture Capital Firm With $200 Million For Cancer Treatments
Greek PM offers tourists affected by wildfires a free stay in Rhodes next year.
Israel: Unprecedented Civil Disobedience Looms as IDF Reservists Protest Judiciary Reform
Google reshuffles Assistant unit, lays off some staffers, to 'supercharge' products with A.I.
End of Viagra? FDA approved a gel against erectile dysfunction
UK sanctions Russians judges over dual British national Kara-Murza's trial
US restricts visa-free travel for Hungarian passport holders because of security concerns
America's First New Nuclear Reactor in Nearly Seven Years Begins Operations
Southeast Asia moves closer to economic unity with new regional payments system
Political leader from South Africa, Julius Malema, led violent racist chants at a massive rally on Saturday
Today Hunter Biden’s best friend and business associate, Devon Archer, testified that Joe Biden met in Georgetown with Russian Moscow Mayor's Wife Yelena Baturina who later paid Hunter Biden $3.5 million in so called “consulting fees”
How “peacekeepers” at the UN spend our American tax dollars.
Singapore Carries Out First Execution of a Woman in Two Decades Amid Capital Punishment Debate
Spanish Citizenship Granted to Iranian chess player who removed hijab
US Senate Republican Mitch McConnell freezes up, leaves press conference
Speaker McCarthy says the United States House of Representatives is getting ready to impeach Joe Biden.
San Francisco car crash
This camera man is a genius
3D ad in front of Burj Khalifa
Next level gaming
BMW driver…
Google testing journalism AI. We are doing it already 2 years, and without Google biased propoganda and manipulated censorship
Unlike illegal imigrants coming by boats - US Citizens Will Need Visa To Travel To Europe in 2024
Musk announces Twitter name and logo change to
The politician and the journalist lost control and started fighting on live broadcast.
The future of sports
Unveiling the Black Hole: The Mysterious Fate of EU's Aid to Ukraine
Farewell to a Music Titan: Tony Bennett, Renowned Jazz and Pop Vocalist, Passes Away at 96
Alarming Behavior Among Florida's Sharks Raises Concerns Over Possible Cocaine Exposure
Transgender Exclusion in Miss Italy Stirs Controversy Amidst Changing Global Beauty Pageant Landscape
Joe Biden admitted, in his own words, that he delivered what he promised in exchange for the $10 million bribe he received from the Ukraine Oil Company.
Swedish Embassy in Baghdad Engulfed in Flames Amidst a Firestorm of Protests
TikTok Takes On Spotify And Apple, Launches Own Music Service
Global Trend: Using Anti-Fake News Laws as Censorship Tools - A Deep Dive into Tunisia's Scenario
Arresting Putin During South African Visit Would Equate to War Declaration, Asserts President Ramaphosa
Hacktivist Collective Anonymous Launches 'Project Disclosure' to Unearth Information on UFOs and ETIs
Typo sends millions of US military emails to Russian ally Mali
Muslim Tycoon Asif Aziz Receives Approval for the Transformation of the iconic London Trocadero Landmark into Mosque
Server Arrested For Theft After Refusing To Pay A Table's $100 Restaurant Bill When They Dined & Dashed
The Changing Face of Europe: How Mass Migration is Reshaping the Political Landscape
China Urges EU to Clarify Strategic Partnership Amid Trade Tensions
Europe is boiling: Extreme Weather Conditions Prevail Across the Continent