Germany to spend as much as 200 billion euros to cut back power prices

Energy prices, especially natural gas, have jumped across Europe because of the war in Ukraine.

THE Germany plans to spend up to €200 billion to help consumers and businesses deal with rise in energy pricesannounced this Thursday, 29, Chancellor Olaf Scholz, at a press conference.

Energy prices, especially natural gas, have jumped across Europe on account of the war in ukraine. According to Scholz, the German government will reactivate an economic stabilization fund, used before during the 2008 and 2009 financial crisis and the coronavirus pandemic.

The fund will be used to limit the price customers pay for gas, which is used to heat homes, generate electricity and power factories. A previously proposed surcharge on gas, which was supposed to help spread the rising cost of buying the fuel on the global market, is being scrapped.

Scholz said Russia’s decision to cut natural gas to Europe and recent leaks in two pipelines showed that no further Russian energy supplies could be expected in the near future.

“However, we are well prepared for this situation,” he said. “We make decisions that allow us to deal with this changed situation.”

German Finance Minister Christian Lindner insisted the fund would no longer entail regular borrowing, saying that Germany “is not expressly going the way of Britain”.

The UK government recently announced loan-funded tax cuts despite plans to spend billions protecting homes and businesses from rising energy prices, resulting in a sharp drop in the pound and a sharp rise in the country’s interest rates.

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