Scholz promises massively falling gas prices in the energy crisis

DAccording to Chancellor Olaf Scholz, the gas prices for citizens and entrepreneurs in Germany will fall drastically as a result of the new government measures. “It’s about a massive reduction in gas prices,” Scholz said on television on Thursday. The commission that has been appointed will make proposals “in mid-October or a little earlier” about the precise design of the gas price brake.

The government will then subsidize prices down as long as they are too high. In the meantime, care will be taken to ensure that more natural gas is available to replace Russian supplies. “In the end, prices should reach normal levels again,” said Scholz, without saying what price level he meant by that.

Habeck warns to save

Germany has the financial strength to stick to this course, Scholz said. It has the lowest debt ratio among the major western industrialized countries (G7). As much money will be used as needed in 2022, 2023 and, if necessary, also in 2024. The government had previously announced a protective shield of up to 200 billion euros.

Scholz defended himself against the accusation that it was a shadow household. Germany took out large loans earlier during the crisis and then repaid them after the crisis because it was able to maintain its economic strength. This will also be the case this time.

Economics Minister Robert Habeck meanwhile warned that saving energy remains essential despite the planned gas price cap. “We still have to bring gas consumption down. 20 percent is the target for Germany,” said the Green politician on Deutschlandfunk. “If households don’t bring their consumption down, there’s still a risk that we won’t have enough gas in winter.” Therefore, the upper peaks of consumption would not be capped, so that there would be an incentive to save. However, the precise design of the gas price cap is the task of the commission that has been set up.

Habeck did not rule out that consumers would also be relieved of the rising energy prices through a premium that would be taxable. “It cannot yet be ruled out that this will happen.” But he emphasized that the money had to be paid “quickly and lump sum” and that no complicated processes had to be set in motion. “Not every price increase will be taken. A certain burden will be taken, but the entire burden will not be taken – not even with this gigantic 200 billion euros.”

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