Germany agrees 200 bln euro package to shield against surging energy prices
11/10/2022 12:13
BERLIN, Sept 29 (Reuters) - German Chancellor Olaf Scholz set out a 200 billion euro ($194 billion) "defensive shield", including a gas price brake and a cut in sales tax for the fuel, to protect companies and households from the impact of soaring energy prices.
Europe's biggest economy is trying to cope with surging gas and electricity costs caused largely by a collapse in Russian gas supplies to Europe, which Moscow has blamed on Western sanctions following its invasion of Ukraine in February.
"Prices have to come down, so the government will do everything it can. To this end, we are setting up a large defensive shield," said Scholz.
Under the plans, to run until spring 2024, the government will introduce an emergency price brake on gas, the details of which will be announced next month. It is scrapping a planned gas levy meant to help firms struggling with high spot market prices.
A temporary electricity price brake will subsidise basic consumption for consumers and small and medium-sized companies. Sales tax on gas will fall to 7% from 19%.
In its efforts to cut its dependence on Russian energy, Germany is also promoting the expansion of renewable energy and developing liquefied gas terminals.
To help households and companies weather any winter supply disruption, especially in southern Germany, two nuclear plants previously due to close by the end of this year will be able to keep running until spring 2023.
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