NextGen Day

The chancellor of Germany unveiled the proposal for a €200 billion ($196 billion) fund to shield consumers and businesses from high energy bills.

Olaf Scholz declared during a news conference that “the German government will do everything in its power to bring prices down.”

He declared that to stop gas prices from rising, the German government would abandon a prior intention to tax customers’ gas purchases.

A board of experts will deliberate on the specifics of the price ceiling, and the measures will be in effect until March or April 2024, added Scholz.

He asserted that the gas tax is no longer necessary and that the additional €200 billion in revenues will benefit businesses.

“Putting a cap on gas prices should promote gas savings.”

According to Economy Minister Robert Habeck, the energy crisis is on the point of developing into an economic and social crisis.

Habeck stated that “capturing gas prices should drive gas savings.”

Finance Minister Christian Lindner declared, referring to Russia’s gas supply interruption, “We are in an energy war.”

According to Lindner, Germany will mobilize its economic might as needed and the actions proposed today shouldn’t increase inflation in the nation.

Fund for economic stabilization

In response to soaring power and gas costs, the prime ministers of Germany’s 16 federal states called on the government to adopt an energy price ceiling on September 28.

This week, Scholz, Habeck, and Lindner talked about the specifics of the gas price cap.

Without extra budgeting, the Economic Stabilization Fund, established to help businesses during the coronavirus disease 2019 (Covid-19) epidemic, will be used to pay for the gas price cap.

Following Germany’s skyrocketing inflation, which rose from 7.9 percent in August to 10 percent in September, setting a record of 71 years, Scholz announced a €200 billion fund.

energy shortage

As a result of Moscow’s decision to halt the delivery of gas through the Nord Stream 1 gas pipeline, Germany is currently experiencing an escalating energy crisis.

To ensure supplies during the energy crisis afflicting Europe, the German government nationalized the energy firm Uniper on September 19. Fortum, a publicly traded corporation in Finland, owns a controlling share in Uniper.

In the meantime, the German energy market regulator (Bundesnetzagentur-BNetzA) warned that the recent spike in natural gas use is unsustainable due to the sudden temperature change that affected homes and businesses last week.

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