Germany Announces €65bn Energy Saving Package

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Image Source: Daily Observer

Germany has launched a €65 billion package of measures to decrease the likelihood of rising energy prices as Europe struggles with constrained supply in the wake of Russia’s invasion of Ukraine.

The package, which is far bigger than the two before it, will include one-time payments to the most disadvantaged individuals and tax breaks for businesses with high energy consumption.

Energy prices have risen since the invasion in February, and Europe is making efforts to wean itself off of Russian energy. Ukraine urged Europe to remain resolute.

According to President Volodymyr Zelensky, Russia is aiming to obstruct every European citizen’s capacity to live a normal life. In his weekly address on Saturday, he said that Russia was preparing a “decisive energy attack on all Europeans” and that the only way to ensure safety was for European countries to work together.

In addition, his wife Olena said in a BBC interview that the issue might end sooner if Ukraine received a lot of support. She underlined to Britons that rising living costs were challenging and that Ukrainians were paying with their lives.

According to Politico, European Union officials have expressed concern that there may reach a breaking point in the months ahead when countries start to suffer from extreme economic hardship while still being encouraged to assist the military and humanitarian effort in Ukraine.

There are already signs of displeasure, as seen by the marchers who took to the streets of Prague, the Czech Republic’s capital, on Sunday to protest rising energy costs and call for lifting sanctions against Russia. Police reported that 70,000 people attended, mostly from far-right and far-left organizations.

In the meantime, several hundred protesters gathered at Lubmin, the German port for the Russian gas pipeline.

They requested that the German government restart Nord Stream 2, a new pipeline that was supposed to be operational but was halted during the invasion.

Two days ago, Russia declared it would stop all gas shipments to Germany through the active Nord Stream 1 pipeline.

Supermarkets in Germany are currently 84% packed, up from less than 50% in June when the country was embroiled in a conflict with Russia.

Germany Chancellor, Olaf Scholz, told reporters that his nation would make it through the winter but said that Russia was “no longer a reliable energy partner.”

He said that the government would provide one-time payments to pensioners, students, and welfare recipients. Caps on energy costs would also be introduced.

Approximately 9,000 energy-intensive businesses would receive tax incentives totaling €1.7 billion.

Read Also: Germany approves energy saving measures for winter 

A windfall tax on energy company profits, in Mr. Scholz’s opinion, would also be used to cut expenses.

The most recent package brought the total amount spent on aid for the energy crisis to nearly €100 billion. Comparably, during the Covid-19 pandemic, around €300 billion was spent on interventions to keep the German economy afloat.

EU members are taking similar steps as Germany

In the event that Liz Truss prevails in the UK Conservative leadership contest on Tuesday, she pledges to announce an energy cost management plan within a week of winning.

The energy ministers of the EU will also meet on September 9 to discuss methods to ease the burden of high energy costs across the Union.

According to a paper that was made public regarding the conference, gas price caps and emergency liquidity support for participants in the energy sector are on the agenda.