BERLIN: Germany on Wednesday put the finishing touches on an energy price cap, the cornerstone of a massive 200-billion-euro ($198-billion) package to shield households and businesses from rising costs.
“Immediate help is on its way!” Chancellor Olaf Scholz said on Twitter, who has ploughed ahead with plans despite criticisms from European partners.
The major energy market intervention is deemed necessary to support consumers at a time when Europe’s largest economy is drifting towards recession and inflation has shot past 10 per cent.
The plan will see the price for a percentage of household and businesses’ typical consumption capped at lower-than-market prices, according to a position paper from the government.
For gas, 25,000 larger businesses, as well as almost 2,000 hospitals and schools will benefit from the cap as soon as January 1 next year, under the plans.
Households and smaller businesses meanwhile could have to wait until March 1 at the latest for the price brake to come into force.
Policymakers will “seek” to apply the relief retroactively from February 2023.
A similar price cap will also apply to electricity from the start of the new year in January, with the measures set to last through to the end of April 2024.
Published in Dawn, November 3rd, 2022
