Germany Mulls ‘Two-Stage’ £195 Billion State Energy Subsidy For Coming Winter

(L-R) Heads of the independent Expert Commission on Gas and Heat, Chemical and Energy Trad
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BERLIN (AP) – A government-appointed expert panel is proposing a two-stage system for distributing up to 200 billion euros ($195 billion) in subsidies Germany has announced to ease the strain of high energy prices.

German news agency dpa reported Monday that the panel will suggest one-off payments to natural gas customers equivalent to a single monthly bill this year, followed by a price subsidy for part of people’s consumption next year.

Citing unnamed officials, dpa reported that from January businesses would pay 0.07 euros per kilowatt hour for the first 70% of their gas bill, based on the previous year’s consumption. Private gas customers would pay 0.12 euros for the first 80%, starting in March.

German Chancellor Olaf Scholz poses for a photo with the interim report “Safely through the winter” by the independent Expert Commission on Gas and Heat, in Berlin, Germany, on October 10, 2022.  (Photo by TOBIAS SCHWARZ/AFP via Getty Images)

The proposal put together by a panel made up of representatives from industry, trade unions, scientists and lawmakers is due to be publicly announced later Monday.

Many European countries have proposed similar subsidies on fossil fuels, prices for which have increased sharply worldwide in the wake of Russia’s attack on Ukraine. But some of Germany’s neighbors have criticized the huge sum Berlin is setting aside, arguing that it will price others out of the market.

German Chancellor Olaf Scholz argues that the criticism is based on a misunderstanding of his government’s plans and says Germany’s subsidy will prevent a shortage of gas that might occur under a system of enforced price caps proposed by other countries.

 

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