German Chancellor Olaf Scholz set out a 200 billion euro ($194 billion) “defensive shield”, including a gas price brake and a cut in sales tax for the fuel, to protect companies and households from the impact of soaring energy prices.
Europe’s biggest economy is trying to cope with surging gas and electricity costs caused largely by a collapse in Russian gas supplies to Europe, which Moscow has blamed on Western sanctions following its invasion of Ukraine in February.
“Prices have to come down, so the government will do everything it can. To this end, we are setting up a large defensive shield,” said Scholz.
Under the plans, to run until spring 2024, the government will introduce an emergency price brake on gas, the details of which will be announced next month. It is scrapping a planned gas levy meant to help firms struggling with high spot market prices.