200 billion euros for economic protective shield

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  • Olaf Scholz

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Relief for electricity and gas prices 200 billion euros for economic protective shield

The Federal Government is erecting a so-called protective shield worth 200 billion euros to reduce the price of electricity and gas. As Federal Chancellor Scholz: explained, one of the things it will be used for is to fund a gas price brake and to help ensure that everyone will be able to cope well and pay their bills.

It is imperative that energy prices come down, Scholz stated: "We are firmly convinced of this, and the Federal Government will do everything in its power to achieve that goal.” Together with Federal Minister of Economic Affairs Robert Habeck and Federal Finance Minister Christian Lindner, Scholz announced in Berlin on Thursday an economic protective shield to protect against the consequences of Russia's war of aggression. The shield is intended to cushion rising energy costs and the most severe consequences for consumers and businesses.

To this end, the Federal Government will provide the Economic and Stabilisation Fund with 200 billion euros, which, Scholz explains, will create the necessary conditions, "to ensure that electricity and gas prices fall – and fall dramatically – and that citizens and businesses will be able to cope with them."

In addition to the electricity price brake, which is currently being prepared, the Federal Government will also introduce a gas price brake, whereby a commission will make specific relevant proposals as soon as possible. The Federal Government will abandon the planned gas surcharge, which is no longer needed due to the direct support of three energy supply companies in particular, the Federal Chancellor explained.

Germany can meet the challenge

Federal Chancellor Scholz pointed out that Russia was using its energy supplies as a weapon in the international arena. Ever since the destruction of the gas pipelines in the Baltic Sea it had become clear that gas would no longer be supplied from Russia in the foreseeable future, he said. However, he continued, Germany was well prepared thanks to gas imports from other countries, the construction of liquefied natural gas terminals, current storage levels in excess of 90 per cent, the recommissioning of coal-fired power plants, and should the need arise, the use of nuclear power plants in southern Germany.

Germany would continue act in solidarity with Ukraine. "However," Federal Chancellor Scholz added, "we are also in a position to ensure that our country, which is economically strong, can meet such a major challenge, so that our people can go about their normal lives, that energy prices are kept at manageable rates rather than going through the roof. We will also ensure that the same is done for businesses, which secure our employment level."

Response to the energy war for prosperity and freedom

Vice-Chancellor and Federal Minister for Economic Affairs Habeck described the 200-billion-euro protective shield as a major and significant step. This, he said, was actually intended to ward off "the attack by Russia, by Putin's regime on our national economy and, by destabilising it, destabilising the democratic order in Europe and in Germany". The protective shield, he continued, was also a measure designed to minimise bureaucracy in the provision of support to the general public and businesses.

"The protective shield,” Federal Finance Minister Lindner explained, “is our reaction to the energy war for prosperity and freedom.” The aim of this war, he continued, was to destroy much of what people had personally built up over decades as well as the structures in small and medium-sized businesses, and the skilled trades and industry sector that have been established over the decades. The decision sent a crystal-clear response to Putin, and also conveyed a message to the people in our country: "We are economically strong, and we will mobilise our economic strength when necessary."