The Social Democrat chancellor said on Sunday he was “very aware” many Germans were struggling to cope with rising prices, and that the government was prepared to help.
“As a country we will get through this difficult time,” Scholz said at a press conference with coalition partners, the Greens and the pro-business FDP party.“We take these concerns very, very seriously.”
Scholz said Germany would use income from windfall taxes to reduce consumer prices for gas, coal and oil. The German government has already announced €300 one-off payments for workers, but will now extend help to other groups. Pensioners, for example, will get €300 and students €200. Aiming to push down costs, the government also promised a “price brake” on energy costs, saying it planned to offer a yet-to-be determined amount of energy to all at a lower rate.
According to Associated Press, the government will also develop a successor to the popular €9 ticket, which allows unlimited travel on local and regional transport across the country. The €9 ticket was announced in June for three months as part of measures to combat soaring inflation and rising fuel costs. The cost of the new monthly ticket could be in the range of €49-€69.
Scholz blamed Vladimir Putin for Germany’s high energy prices, saying Russia “has broken its contract” and was “no longer a reliable energy supplier”. At the start of the war in Ukraine, Germany got 55% of its gas from Russia, but this has fallen to 9.5%, amid a push to phase out Russian fossil fuels and drastic reductions in supply.
Europe faces a looming energy crisis after Russia halted gas flows from the Nord Steam I pipeline into Germany. Gazprom said on Friday after the market closed that the pipeline - the largest to Europe with capacity to deliver 55bn cubic metres of gas a year – would be shut down indefinitely because of a leak and would not restart until repairs had been completed. Siemens Energy, which supplies and maintains equipment to the pipeline, said the leak could be sealed and was not a technical reason to stop gas flows.
Energy analysts predicted a surge in gas prices when markets reopen on Monday. Before Gazprom’s announcement on Friday, gas prices had fallen partly on expectations that supplies would be turned back on as scheduled on Saturday. “On Friday … the market was already pricing in Nord Stream 1 flows coming back,” said Leon Izbicki, a gas analyst at Energy Aspects. “We expect a significantly stronger open [for gas prices] on Monday.”
Speaking on Saturday in his nightly video address, Ukraine’s president, Volodymyr Zelenskiy, accused Moscow of weaponising energy supplies against European countries it cannot “yet” attack with military force.
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