German government to take 30 percent stake in gas company Uniper
In a press conference held in Berlin on Friday, Scholz set out the government’s plans to tackle the ongoing energy crisis, including a new package of relief measures for consumers and the purchase of a 30 percent stake in the struggling energy giant Uniper.
The price of energy – and particularly natural gas – have been on the rise for several months, but the situation has worsened since Russia launched its full-scale invasion of Ukraine.
“Everything will get more expensive,” Scholz said, adding that the higher energy costs on the market “will soon become noticeable for all of us”.
To ease the burden on German households, the chancellor revealed that the government was currently mulling a brand new set of energy relief measures.
“The contours of this relief package have been discussed in the coalition and are in place,” he said.
So far, two key plans have been agreed on by the cabinet: a review of housing benefits that will include more money for energy costs, and reform of long-term unemployment benefits.
The latter involves a rebrand of the controversial Hartz IV system that will scrap most sanctions and increase the amount of money for recipients.
The new system, which will be called Bürgergeld (or ‘Citizens’ Allowance’), is due to come into force in January 2023. Proposals for the reforms were announced by Labour Minister Hubertus Heil (SPD) on Thursday.
READ ALSO: Bürgergeld: What to know about Germany’s unemployment benefits shake-up
In addition, the government is considering putting legal protections in place for tenants who find themselves in financial difficulties, Scholz said.
A similar moratorium for tenants was put in place during the Covid crisis, when many people saw their working hours reduced or lost their jobs.
In mid-September, the cabinet will meet to discuss supplementary measures that could form part of the third energy relief package this year.
“There are many good, concrete proposals on the table,” the Chancellor explained.
Previous energy packages have included measures such as the €9 monthly travel ticket and a cut in tax on fuel.
‘You’ll never walk alone’
In the course of the press conference, Scholz repeatedly expressed a mantra well-known to fans of the English football club, Liverpool F.C.
“You’ll never walk alone,” he said in English, quoting the club anthem. “No-one must face the future alone.”
However, from October 1st at the latest – and possibly even earlier – households in Germany may start to see a rise in their energy bills.
This is because the government is attempting to stop the struggling German energy sector from going under in the wake of the gas shortages and price shocks.
An electricity metre in a house. Photo: picture alliance/dpa | Uli Deck
In the first step towards bailing out the sector, the government plans to purchase a 30-percent stake in energy giant Uniper. It will then put legal mechanisms in place on either September 1st or October 1st that will allow the company to pass on up to 90 percent of its additional costs to consumers.
Scholz warned that consumers could see their energy bills go up this autumn. A four-person household, for example, can expect an increase of €200-300 per year.
Economics Minister Robert Habeck (Greens) has previously warned that households could see price rises “in the four-digit range” this winter.
In addition, the government has already put a number of new measures in place to try and shore up Germany’s energy supply.
These include building new LNG terminals in the North Sea, setting targets for filling the gas storage facilities, keeping coal plants running and ensuring that coal transported by trains is prioritised on the railway tracks.