All about the new Germany 65 billion euros purchasing power bill.
Germany will release 65 billion euros to finance its new aid plan to protect consumers and businesses from the effects of soaring inflation. The plan was validated on Sunday by the three parties of the coalition government of Chancellor Olaf Scholz.
A massive aid plan for purchasing power. The German government announced, on Sunday, September 4, a salvo of measures to mitigate the effects of inflation totaling 65 billion euros and after laborious discussions within Olaf Scholz's coalition.
The social democrat, at the head of a coalition formed with environmentalists and liberals, had gathered on Saturday, until late in the evening, the main figures of the government to finalize this plan, which had been expected for several weeks.
Germany 65 billion euros purchasing power
Repeating his mantra that Germans will "never be alone" in the face of the energy crisis, Olaf Scholz unveiled a series of measures, including a one-time energy check of 300 euros for millions of pensioners and 200 euros for students.
Inflation rose again in Germany in August, to 7.9% year-on-year, still driven by the surge in energy prices in the wake of the war in Ukraine.
In October, a gas tax designed to avoid the bankruptcy of German energy groups is due to come into force. It will lead to a further increase in the energy bill.
The head of the German Central Bank, the Bundesbank, has deemed it likely that inflation will reach 10% by the end of the year, a first since the 1950s.
As in other European countries, rising prices are fuelling public concern and calls for demonstrations, mainly on the initiative of the far right or the far left, are worrying the government.
Germany 65 billion euros purchasing power start
Since the beginning of the Russian invasion of Ukraine at the end of February, Olaf Scholz's government has already released two packages of aid to households totaling some 30 billion euros.
The announcement of this new plan has been postponed several times, illustrating the friction between the three parties in the coalition that has been in power for nine months.
Symbol of the difficult compromise reached: Olaf Scholz's commitment to tackle "speculation" on the energy market and the exceptional profits made by producers who are "taking advantage" of record gas prices, in the words of the Chancellor.
This issue has divided the government since the beginning of the summer. Environmentalists and social democrats want a taxation of the billions earned by certain groups. The Liberal camp, represented by the Minister of Finance, Christian Lindner, is fiercely opposed to this.
The government finally decided to advocate for the introduction, at European level, of a mandatory contribution to be paid by companies in the energy sector, a measure "not covered by tax law", said Christian Lindner.
Germany 65 billion euros purchasing power reforms
EU member states are due to meet next week to discuss a reform of the European energy market and possible initiatives to quickly ease consumer bills.
The German government says it is ready to go it alone if no agreement is reached at European level, but Olaf Scholz said he was "confident" in the possibility of an agreement between the Twenty-Seven.
This mandatory contribution could bring in "several tens of billions of euros", assured the Minister of Finance.
Among the other measures of the aid plan, the government provides for a payment of heating costs for people receiving housing benefits and an envelope of 1.5 billion euros to set up a new rebate on public transport.
This is to replace the popular nine-euro monthly subscription that Germans were able to take advantage of until the end of August on the entire bus and train network, excluding high-speed lines.
Germany 65 billion euros purchasing power bill
The financing of this new ticket would be borne by the State and the regions and the future subscription should cost "between 49 and 69 euros".
In Europe's largest economy, the threat of a gas shortage this winter seems to be receding. The country is struggling to reduce its dependence on Russia, which still supplied it with 55% of its gas imports in February, and considers that its efforts are beginning to pay off.
Plans to install several floating terminals to import liquefied natural gas (LNG) have accelerated significantly, the country has diversified its suppliers and relaunched coal-fired power plants.
"We will be able to cope with this winter," Olaf Scholz assured, despite the prolonged shutdown, announced on Friday by the energy company Gazprom, of the Nord Stream gas pipeline that connects Russia to northern Germany.
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