11 Oct 2022, 12:47
Carolina Kyllmann

Gas cost relief proposal “quick fix” lacking long-term solution – media reactions

Frankfurter Allgemeine Zeitung / Handelsblatt / Die Welt

Media reactions to the German expert commission's 90 billion euros gas price relief proposal has been largely negative, with many journalists pessimistic about its long-term effectiveness.

In the Frankfurter Allgemeine Zeitung, Christian Geinitz called the proposal a “quick fix for the energy crisis,” and pointed out that commission experts said that speed had taken precedence over outcome accuracy. Important information on consumption and income data that should have been retrieved from the start of Russia’s invasion of Ukraine isn’t available, Geinitz writes, as a result tax money could now be handed out only evenly – to those who need it and those who do not. "It is therefore to be feared that the hectic rush with regard to the price brake will lead to a similar mess as with the gas levy, which it is supposed to replace," he wrote.

Agreeing that the German government has partly brought its current predicament on itself, Klaus Stratmann wrote in Handelsblatt that the taboo on domestic energy production must fall. “The dramatic supply shortage of natural gas will remain a problem for years, not only until spring 2024,” Stratmann pointed out. The gas relief package is only treating symptoms and not dealing with the root cause of the energy supply problem, Stratmann said, suggesting the government should focus on saving gas while opening new supply sources at the same time.

Justus Haucap in Die Welt agreed that while state subsidies should, as much as possible, only go to households and companies who need it most, there is a lack of data on who qualifies as being in need. He also pointed out that while incentives to save gas are to be maintained, a perception that heating might not be too expensive might weaken the effectiveness of these incentives to reduce gas consumption. In the end, Haucap concludes: “All in all, the proposals are not so bad."

Tasked by the government to find ways to lower the burden of rising gas prices, an expert commission proposed a gas price relief of about 90 billion euros by 2024 for German households and businesses affected by rising energy prices. The interim report proposes a one-off payment in December 2022 and subsidies for a basic volume for gas use for both small and large consumers starting next year. The proposals now have to be debated by the government and parliament.

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