German Chancellor Olaf Scholz announced on Thursday the allocation of 200 billion euros to cap energy prices to support consumers in the context of inflation that continues to rise after Russia’s invasion of Ukraine.
“Prices must fall, so the Government will do everything possible. For this, we are assembling a large protective shield,” said Olaf Scholz, AFP and Agerpres reported.
Under the plans announced on Thursday, which will be financed by new loans, the government in Berlin will introduce an emergency curb on gas and electricity prices and abandon its previous intention to introduce a gas tax that would have been paid by consumers. the idea is to avoid another price increase.
In the coming period, the German government will reveal the details of this new device, which will be added to previous support measures with a total cost of around 100 billion euros.
An energy crisis unprecedented in the last 50 years
Annual inflation in Germany rose to 10% in September, the highest rate since December 1951.
“We are in a war for energy, for prosperity and freedom,” said German Finance Minister Christian Lindner. “We want to clearly separate crisis spending from our normal budget management, we want to send a very clear signal to the capital markets,” Lindner added.
The explosion of natural gas and electricity prices after the post-COVID recovery, and especially after the start of the war in Ukraine, has triggered an energy crisis unprecedented in the past 50 years, a crisis that no country will escape. Many states have introduced measures to support households and businesses, and a number of countries, such as France and Spain, have introduced energy price caps.
Germany is currently paying a significant price for its dependence on natural gas from Russia, which before the war in Ukraine was responsible for 55% of Germany’s gas needs. Europe’s first economy must now find other sources of supply in a market where prices have exploded.
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Source: Hot News RO
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