The German government has announced a $65bn plan to help people and businesses cope with soaring prices as several European nations introduce emergency measures to prepare for a long winter in the wake of disruption in Russian gas supplies to Europe following the Ukraine war.
German Chancellor Olaf Scholz on Sunday announced a series of measures in light of expectations that energy costs would soar in the coming months. Energy prices have skyrocketed as Europe has been trying to wean itself off Russian energy following Moscow’s invasion of Ukraine in late February.
Two days ago, Moscow shut a main pipeline supplying gas to Europe indefinitely, forcing countries like Germany to seek alternative energy supplies elsewhere.
Scholz said his government had been planning for a total halt in gas deliveries in December but he promised that his country would make it through the winter.
“Russia is no longer a reliable energy partner,” Scholz told a news conference in Berlin.
The German leader said the package is aimed at shielding customers and businesses from soaring inflation with measures including benefit hikes and a public transport subsidy.
Income tax-paying workers will receive a one-off energy price allowance of $300, while families will receive a one-time bonus of $100 per child, which doubles for those on low incomes.
Over the next few years, some $12bn to $13bn will be allocated annually to subsidise renovations to old buildings.
However, German households will have to pay almost $500 more a year for gas after a levy was set to help utilities cover the cost of replacing Russian supplies.
The levy, introduced to help Uniper and other importers cope with soaring prices, will be imposed from October 1 and will run until April 2024.