BERLIN —
Germany on Wednesday put the
finishing touches on an energy price cap, the cornerstone of a massive
200-billion-euro package to shield households and businesses from rising costs.
اضافة اعلان
“Immediate help is on its way!” Chancellor Olaf
Scholz said on Twitter, who has ploughed ahead with plans despite criticisms
from European partners.
The major energy market intervention is deemed
necessary to support consumers at a time when
Europe’s largest economy is
drifting towards recession and inflation has shot past 10 percent.
The plan will see the price for a percentage of
household and businesses’ typical consumption capped at lower-than-market
prices, according to a position paper from the government.
For gas, 25,000 larger businesses, as well as almost
2,000 hospitals and schools will benefit from the cap as soon as January 1 next
year, under the plans.
Households and smaller businesses meanwhile could
have to wait until March 1 at the latest for the price brake to come into
force.
Policymakers will “seek” to apply the relief
retroactively from February 2023.
A similar price cap will also apply to electricity
from the start of the new year in January, with the measures set to last
through to the end of April 2024.
December help
While the cap for smaller consumers will only come into force later, the
government will pick up the bill for household heating in December.
For households the
price of a kilowatt-hour of gas will be capped at 12 cents for up to 80 percent
of their typical usage.
The same unit of
gas currently costs billpayers 18.6 cents, according to the price comparison
site Check 24.
All in all, the
support measures could save a single-person household with a typical gas
consumption of 5,000kWh around 264 euros over a year, the site estimates.
The partial price
cap was designed to maintain “incentives to save energy” despite lowering prices
for consumers, according to the government paper.
Scholz will meet
with state premiers later Wednesday to finalize the details of the plan.
Ahead of the
meeting, some regional leaders pressed the federal government to apply the gas
cap for households sooner.
“People need
reliable protection from the higher costs, especially in the cold months of
January and February, when they use heating intensively,” Hendrik Wuest, the
regional leader of North Rhine-Westphalia, told Der Spiegel magazine.
Germany, long reliant on
Moscow for energy imports, has been hit hard by
the sharp rise in prices since the invasion of Ukraine and the cut to supplies.
Despite the German
economy eking out 0.3-percent growth between July and September, most analysts
still expect the country to slip into recession as the high costs of energy
drags on production.
Businesses that
have been crying for support from the government welcomed the plans.
The price cap
measures should “create a bit of security and at the same time ease worries”,
the BDI industrial lobby said Monday ahead of the final agreement.
Berlin’s massive
go-it-alone plan to shield its economy has ruffled feathers among European
partners who would have preferred a common solution.
They feared that
more highly indebted
EU countries could not afford the outlay made by Germany,
while the plan could affect their own energy costs.
Germany’s energy
price shield will be partly financed through new borrowing through an economic
stabilization fund created during the coronavirus pandemic.
Berlin also intends to fund the cap by skimming off part of the bumper
profits made by energy companies as prices have risen.
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