Germany announces €65bn package to curb soaring energy costs

September 5, 2022

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Germany has announced a €65bn (£56.2bn) package of support to ease the threat of rising energy costs, as Europe struggles with scarce supplies after Russia's invasion of Ukraine.

The package, much bigger than two previous ones, will include one-off payments to the most vulnerable and tax breaks to energy-intensive businesses.


Energy prices have soared since the February invasion, and Europe is trying to wean itself off Russian energy.


The stand-off with Russia has forced countries like Germany to find supplies elsewhere, and its stores have increased from less than half full in June to 84% full today.


German Chancellor Olaf Scholz told journalists that Germany would get through the winter, adding that Russia was "no longer a reliable energy partner" with further disruption forecast.


The package announced by the German government would involve one-off payments to pensioners, people on benefits and students and further caps on all energy bills.


Some 9,000 energy-intensive businesses would receive tax breaks to the tune of €1.7bn as a swooping set of changes look to ease the burden faced by individuals and businesses alike.


A windfall tax on energy company profits would also be used to mitigate bills, Mr Scholz said.


The latest package brings the total spent on relief from the energy crisis to almost €100bn, which compares to about €300bn spent on interventions to keep the German economy afloat during the Covid-19 pandemic.


Countries all across Europe are considering similar measures, with EU energy ministers due to meet on 9 September to discuss how to ease the burden of energy prices across the bloc.


A document released about the meeting says the agenda will include price caps for gas and emergency liquidity support for energy market participants.

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