Germany prepares for winter: The German tariff shield on energy prices, announced by Chancellor Olaf Scholz to mitigate the impact of rising prices, could come into force in early 2023, according to proposals from the group that experts government officials did on Monday.
This tariff shield is the centerpiece of the 200,000 million euro energy “bazooka” announced at the end of September. The first version of the system plans to subsidize 80% of household consumption from March 2023 to April 2024. Beyond this volume, individuals would pay for gas at market prices.
For large companies, the subsidized quota, at a ceiling price of 7 euro cents per kilowatt hour, would be limited to 70% of normal average consumption with entry into force as of January 1.
This new aid package is not “against Europe but in Europe, for Germany and the Germans,” Michael Vassiliadis, head of the IGBCE chemical union and a member of the commission, told reporters. The German energy plan has earned Berlin much criticism from its European partners who denounce a lack of consultation and solidarity.
next transitional aid
Between now and the entry into force of the shield, estimated in several months due to its complexity, experts propose that the Government pay in December new direct aid to homes and small businesses to pay gas and heating bills, for an estimated total of 5 billion euros.
Germany, Europe’s largest economy, has been hit hard by the energy crisis gripping the continent, while Russia has slashed deliveries of Russian gas on which the country was especially dependent.
He stressed that gas prices would certainly not return to their pre-Ukrainian-invasion level and that the industry had to get used to this “new normal”.
Experts have warned that future gas price caps should not incentivize consumers to forgo much-needed savings to stave off shortages.
The government will now review the recommendations and should decide in the coming weeks.
Source: BFM TV
