german parliament approved at noon on Friday the government’s proposal for a package 200 billion euros to build a wall against soaring energy prices.

Rescue package aims to strengthen industries as well as households in the face of the difficulties that the energy crisis entails.

The plan will take the form loans pay energy price ceilings and subsidies.

According to the German government, the fund should remain until 2024.

households they could benefit from it price ceiling 80% from their normal consumption March.

Price cap for a large company may come into force January.

“Debt Brake”

To allow funding, German lawmakers first voted to suspend the so-called “debt brake”.

This “brake” that limits the federal government’s structural net borrowing to 0.35% of gross domestic product (GDP), was adopted 2009.

According to the German Basic Law, the “brake” can only be suspended “in the event of natural disasters or extraordinary emergencies that are beyond the control of the state and significantly affect the economic situation of the state.”

OUR Bundestag repeatedly suspended the law since the start of the coronavirus pandemic to allow the country to borrow heavily.

Euroopposition

It is worth noting that the German package was found at focus of confrontation in the context of the summit EU

Early on Friday morning, however, the President of the European Council Charles Michel said European Union leaders “agreed to work on measures” to combat rising energy prices.

27 leaders took part in a two-day summit in Brussels aimed at bridging differences between countries to combat the continent’s energy crisis.

#ESCO energy agreement reached.

Unity and solidarity prevail.

We agreed to work on measures to curb energy prices for the population and businesses.

— Charles Michel (@CharlesMichel) October 21, 2022

The meeting lasted until Friday morning, as the differences between some countries could not be overcome. No consensus was reached on limiting the price of natural gas.

However, the President of the European Commission, Ursula von der Leyensaid the summit had created “a solid roadmap for continuing to work on the issue of energy prices.”

Agreement clauses

• common natural gas markets on a voluntary basis, with the exception of the mandatory accumulation of demand for 15% of the needs of each Member State to replenish natural gas reserves. In this context, negotiations will continue with reliable partners from the EU for the full and mutually beneficial use of the common European energy platform, which will be equally accessible to the Western Balkans, Ukraine, Moldova and Georgia.
• new additional European standard by early 2023.
• a temporary dynamic price corridor in natural gas transactions to immediately limit episodes of excessive price increases, subject to the guarantees set by the European Commission in its October 18 proposal.
• a temporary European framework for limiting the use of natural gas in electricity generation (Iberian model), which should be preceded by a cost-benefit analysis. At the same time, measures must be taken to prevent the growth of natural gas consumption, to deal with the consequences of financing and distribution, as well as the consequences outside of Europe.
• improving the functioning of energy markets to increase transparency, mitigate liquidity stress, and address factors that increase natural gas price volatility while maintaining financial stability.
• accelerating the development of renewable energy sources and related networks.
• energy solidarity measures in case of supply disruptions at the national, regional or EU level, in the absence of bilateral solidarity agreements, as well as intensifying energy saving efforts.
• mobilization of all available tools to strengthen the stability of European economies, maintain competitiveness and integrity of the single market.
• accelerating work on the structural reform of the electricity market and moving further towards a full energy union, and strengthening storage and interconnection infrastructure.