German finance minister earmarks 83 billion euro for energy price brakes – report
The German finance minister, Christian Lindner (FDP), has earmarked 83 billion euros for the energy price brakes of gas and electricity, reports news agency Reuters. The price brakes, aimed to act as a relief package for households and businesses against soaring energy prices until 2024, are part of Germany’s 200 billion euro “defence shield”. From 2023, over 40 billion euros will be spent on relief measures for the gas price brake while another 43 billion euros have been earmarked for the electricity price brake, according to the defence shield’s funding plan, seen by Reuters. An expert commission had proposed a gas price brake of 90 billion euros by 2024. Submitted to the parliament’s budget committee on Sunday (6 November), the defence shield plan is part of the “Economic Stabilisation Fund,” which originally was set up to support the economy during the COVID-19 pandemic. The plan breaks down what the 200 billion euros will be used for and in addition to the electricity price brake, it also earmarks over 15 billion euros to support gas importer Uniper and sets aside 6 billion euros to support hospitals and care facilities, Reuters reports.
Germany will borrow up to an additional 200 billion euros this year to finance its relief packages, which will run outside the country’s budget. According to the plan, 4.4 billion euros in interest payments are planned for next year. “Germany is using its economic firepower in this energy war,” said Lindner when the “defence shield” was first announced, adding that it would buy time so the country can work towards a new post-crisis normality. The government would make use of this time to boost the rollout of renewables, Lindner said.