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Germany to allocate USD 195 billion to combat excessive energy prices

Germany to allocate USD 195 billion to combat excessive energy prices

Germanys government is reportedly planning to spend up to USD 195 billion to assist businesses and consumers deal with increased energy costs, especially for natural gas, as a result of the conflict in Ukraine.

Chancellor of Germany Olaf Scholz declared that the government would do everything it can to bring prices down and that it is reactivating a fund for economic stabilization that was previously utilized to combat the Covid-19 outbreak and the global financial crisis.

Speaking of which, the fund will be used to cap the price consumers pay for natural gas, which powers factories, heats houses, and produce electricity. Moreover, the government is abandoning a previously proposed natural gas surcharge that was intended to help share the increased cost of acquiring the fuel on the worldwide market.

Scholz, who is undergoing isolation due to a COVID-19 infection, stated that Russias decision to reduce natural gas exports to Europe, as well as recent leaks on the Nord Stream 1 and 2 pipelines flowing from Russia to Germany, demonstrated that more Russian energy supplies could not be expected in the foreseeable future.

According to European officials, Gazprom, a state-owned exporter of gas, is reducing its output as a kind of energy blackmail to put pressure on European nations who have sided with Ukraine and imposed sanctions on Moscow.

However, Scholz stated that they were prepared for this circumstance and have made decisions that would allow them to handle this altered scenario.

According to Christian Lindner, Finance Minister of Germany, the country is explicitly not following in the footsteps of the United Kingdom, and these funds will not require extra regular borrowing.

Despite intentions to spend billions protecting households and businesses from skyrocketing energy bills, the UK government recently announced tax cuts funded by borrowing, which led to a dramatic decline in the value of the pound.

Source Credit:

https://timesofindia.indiatimes.com/business/international-business/germany-to-spend-billions-to-tackle-high-energy-prices/articleshow/94536839.cms

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Rashi Thakkar

Rashi Thakkar

Rashi started her journey in content when she was completing her MBA. Since then, she has helped well-known startups and businesses boost their online presence. Currently Rashi pens downs insightful articles for AlpenHornNews and various other websites, covering an array of sectors from finance and business to technology and healthcare.