Monday, October 3, 2022
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Germany announces €65bn package to curb soaring energy costs

In an effort to lessen the prospect of increasing energy prices as Europe struggles with limited supplies in the wake of Russia’s invasion of Ukraine, Germany has unveiled a €65 billion (£56.2 billion) package of measures.

The package, which is substantially larger than the two before it, will include one-time payments to the most disadvantaged people and tax benefits for companies that use a lot of energy.

Since the invasion in February, energy costs have skyrocketed, and Europe is attempting to wean itself off of Russian energy.

Ukraine encouraged Europe to maintain its resolve.

Russia is attempting to disrupt every European citizen’s ability to lead a normal life, according to President Volodymyr Zelensky. On Saturday, Putin said in his nightly speech that Russia was planning a “decisive energy strike on all Europeans” and that only cooperation among European nations would provide safety.

Additionally, his wife Olena said in a BBC interview that the situation might end sooner if there was significant support for Ukraine. While growing living expenses were difficult, she emphasized to Britons that Ukrainians were paying with their lives.

Politico reports that officials from the European Union have cautioned that there would likely be a breaking point in the coming months when nations begin to experience severe economic suffering while still being urged to support the military and humanitarian operation in Ukraine.

There are already hints of unhappiness, with demonstrators marching to the streets of Prague, the capital of the Czech Republic, on Sunday to demonstrate against rising energy costs and demand the lifting of sanctions against Russia. According to police, there were roughly 70,000 attendees, mostly from far-right and far-left organisations.

Meanwhile, several hundred demonstrators gathered in Lubmin, the Russian gas pipeline’s terminal in northeastern Germany.

They demanded that Nord Stream 2, a new pipeline that was set to be put into operation but was stopped by the German government during the invasion, be put into service.

Russia said two days ago that it will permanently halt gas deliveries to Germany through the Nord Stream 1 pipeline, which is currently in use.

Germany’s shops have been more filled since June, when they were less than half full due to the standoff with Russia, and are now 84% full.

Olaf Scholz, the chancellor of Germany, assured reporters that his country will survive the winter but said that Russia was “no longer a trustworthy energy partner.”

He said that the government will give one-time payments to students, retirees, and recipients of welfare. Energy bill caps would also be implemented.

A total of €1.7 billion in tax benefits would be given to almost 9,000 energy-intensive firms.

According to Mr. Scholz, a windfall tax on the earnings of energy companies would also be used to reduce costs.

With the most recent package, the total amount spent on energy crisis assistance has reached about €100 billion. This compares to the roughly €300 billion spent on interventions to maintain the German economy during the Covid-19 epidemic.

Similar measures are being considered by nations around Europe.

If Liz Truss wins the UK Tory leadership election on Tuesday, she promises to make an announcement about a strategy to cope with energy prices within a week.

Additionally, on September 9th, the EU’s energy ministers will gather to examine ways to lessen the burden of high energy costs across the Union.

Gas price ceilings and emergency liquidity assistance for energy market players are on the agenda, according to a document that was made public regarding the conference, according to the Reuters news agency.

Bob Carlson
Bob Carlson
Bob Carlson is a business journalist, with over a decade of experience in the trenches of reporting up-to-date business news for publications all over the world. With a wealth of knowledge at his back, Bob strives to bring the most important insights into the business world for TheOptic daily.
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