Germany releases 65 billion euros in favor of purchasing power

Published on: 04/09/2022 – 13:59 Germany will release 65 billion euros to finance its new aid plan intended to protect consumers and businesses from the effects of soaring inflation. The plan was validated on Sunday by the three parties of Chancellor Olaf Scholz’s coalition government. 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 the coalition of Olaf Scholz. The Social Democrat, at the head of a coalition formed with ecologists and liberals, had gathered on Saturday, until late in the evening, the main figures of the government to finalize this plan, which had been awaited for several weeks. Repeating his mantra according to which the 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, at 7, 9% over one year, still driven by soaring energy prices in the wake of the war in Ukraine. In October, a tax on gas intended to prevent the bankruptcy of German energy groups is to come into force. It will lead to a further rise in the energy bill. The boss 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. “speculation”As in other European countries, the rise in prices is fueling the anxiety of the population and the calls for demonstrations, essentially at the initiative of the far right or the far left, are worrying the government. Since the start of the Russian invasion of Ukraine at the end of February, the government of Olaf Scholz has already released two trains of household aid totaling some 30 billion euros. The announcement of this new plan has been postponed. several times, illustrating the friction between the three parties of the coalition in power for nine months. Symbol of the difficult compromise found: the commitment of Olaf Scholz to tackle “speculation” on the energy market and windfall profits made by producers who “benefit” from record gas prices, in the words of the Chancellor. This question has divided the government since the beginning of the summer. Ecologists and social democrats want a tax on the billions earned by certain groups. The liberal camp, represented by the Minister of Finance, Christian Lindner, is fiercely opposed. The government finally decided to plead for the introduction, at European level, of a compulsory contribution to be paid by companies in the energy sector. EU member states are due to meet next week to discuss a reform of the European energy market and possible initiatives to quickly reduce the consumer bill. 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. Reduced dependence to Russian gas This compulsory 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 ent heating costs for people receiving housing allowances 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 whose Germans were able to take advantage of the entire bus and train network until the end of August, excluding high-speed lines. 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 starting to pay off. The projects to install several floating terminals to import gas liquefied natural gas (LNG) have experienced a marked acceleration, the country has diversified its suppliers and relaunched coal-fired power plants. “We will be able to face this winter”, assured Olaf Scholz, despite the prolonged shutdown, announced Friday by the energy company Gazprom, of the Nord Stream gas pipeline which connects Russia to the north of Germany. With AFP