Against high energy prices: the federal government agrees on a multi-billion defense shield – gas levy abolished

The gas levy, which was controversial until recently, is off the table – instead there should be a gas price brake. It is not yet clear who will be relieved and to what extent. A commission is to make proposals by mid-October.

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“The prices have to go down,” said Chancellor Olaf Scholz (SPD) on Thursday at a press conference in Berlin. The federal government will do everything for this. This should help pensioners, families, craft businesses and industry to pay prices. The plans put the government in a position to waive the planned gas surcharge, said Scholz. “She is no longer needed.”

The gas surcharge, which was supposed to be levied from October 1st, will now be withdrawn by ordinance, said Economics Minister Robert Habeck (Greens). If consumers have already paid, they must be repaid.

Scholz described the planned state support for the energy supply and the planned price brakes as “double boom”. He recalled his statement about previous state aid in the Corona crisis that it was about getting out of the crisis with “boom”. “You can say it’s a double boom here,” said Scholz. The point is to reduce energy prices quickly and quickly and clearly for everyone.

According to Habeck, “enormous financial strength” is being raised “to support and maintain the future viability and investment capability of the German economy”. “It’s not just about getting through this crisis somehow, but about surviving this time as a strong and robust economy.”

The Chancellor made it clear that Russia uses its energy supplies as a weapon. At the latest since the damage to the pipelines in the Baltic Sea, one can say: “For the foreseeable future, gas will no longer be supplied from Russia.”

Despite the abolition of the gas surcharge, VAT on the supply of gas is to be reduced as planned from October 1st. “The reduction in VAT (…) will be retained and will also be applied to district heating contracts,” said Habeck. From October 1st to March 31st, 2024, the VAT on gas should only be 7 instead of 19 percent. According to Habeck, the funds to finance the reduction are not included in the 200 billion euros mentioned.

Federal Finance Minister Christian Lindner (FDP) called on the opposition Union to support the planned multi-billion defense shield against galloping energy prices. “We are in an energy war for prosperity and freedom,” said Lindner, referring to Russia’s war of aggression in Ukraine. The size of the defense shield with the planned volume of up to 200 billion euros should also show this. “In a situation like the one we are in now, I also expect the CDU/CSU parliamentary group to agree in principle to the procedure.”

CSU boss Markus Söder praised the “defense shield” planned by the federal government in principle. He always called for a big hit, “this seems to be the case,” said the Bavarian Prime Minister in Munich. Finally, he could not evaluate the announcement of the traffic light government. However, there are two good and fundamentally correct signals that the gas surcharge is coming off and that there should also be a cap on gas prices.

The coalition partners had come under increasing pressure in recent days due to the lack of Russian gas supplies to Germany in the course of the Russian war of aggression in Ukraine. A gas surcharge was originally intended to protect large gas suppliers from insolvency. However, the increase in costs for consumers due to the surcharge was viewed critically.

Leading economic research institutes warned that a gas price brake could fuel the already high inflation because consumers would then be able to spend more money again. Such a brake is also criticized because, according to critics, there would then be less incentive to save the scarce gas.

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BERLIN (dpa-AFX)

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