Germany announces €65 billion package to curb soaring energy costs

Germany has announced a €65bn (£56.2bn) package of measures to mitigate the threat of rising energy costs as Europe struggles with scarce supplies after Russia’s invasion of Ukraine.

The package, much bigger than the previous two, will include one-off payments for the most vulnerable and tax breaks for energy-intensive businesses.

Energy prices have skyrocketed since the February invasion and Europe is trying to wean itself off Russian energy.

Ukraine urged Europe to stand firm.

President Volodymyr Zelensky said Russia was trying to destroy the normal life of every European citizen. In his Saturday night speech, he said Russia was preparing a “decisive energy attack against all Europeans”, and that only unity among European countries would provide protection.

And in a BBC interview broadcast on Sunday, his wife Olena said that if support for Ukraine was strong, the crisis would be shorter. She reminded Britons that while the rising cost of living was difficult, Ukrainians were paying with their lives.

According to the Politico website, European Union officials have warned that there will likely be a tipping point in the coming months when countries begin to feel acute economic pain while still being urged to help the military effort. and Ukrainian humanitarian.

There are already small signs of discontent, with protesters taking to the streets of the Czech capital Prague on Sunday, rallying against high energy prices and calling for an end to sanctions against Russia. Police said around 70,000 people, mostly far-right and far-left groups, attended.

Meanwhile, several hundred protesters gathered in Lubmin in northeastern Germany, the terminal of the Nord Stream gas pipeline from Russia.

They were calling for the commissioning of Nord Stream 2, a new pipeline that was about to be commissioned but was blocked by the German government after the invasion.

Two days ago, Russia announced that it was indefinitely suspending gas exports to Germany via the Nord Stream 1 gas pipeline already in operation.

The standoff with Russia has forced countries like Germany to source supplies elsewhere, and its stores have gone from less than half full in June to 84% today.

German Chancellor Olaf Scholz told reporters that Germany would get through the winter, adding that Russia was “no longer a reliable energy partner”.

He said the government would make one-time payments to pensioners, benefit recipients and students. There would also be caps on energy bills.
Some 9,000 energy-intensive companies would benefit from tax relief of up to 1.7 billion euros.

A windfall tax on energy company profits would also be used to ease bills, Scholz said.

The latest package brings the total spent on alleviating the energy crisis to almost 100 billion euros, compared to around 300 billion euros spent on interventions to keep the German economy afloat during the Covid-19 pandemic.

European countries are considering similar measures.

Britain’s Conservative leadership hopeful Liz Truss has said she will announce a plan to meet energy costs within a week if she becomes prime minister on Tuesday.

And EU energy ministers are due to meet on September 9 to discuss how to ease the burden of energy prices across the bloc.

A document released about the meeting says the agenda will include gas price caps and emergency liquidity support for energy market participants, Reuters news agency reported.
Source: BBC