Germany Upper House: Germany’s upper house of parliament has approved a so-called energy rate break, which will cap electricity and gas prices in Europe’s biggest economy to ease the impact of higher prices on consumers and businesses.
Germany’s Chancellor Olaf Scholz said in a tweet, “Rate breaks for gas, electricity and district heating are coming! It’s a good thing the Bundestag and Bundesrat have decided.” According to the report of the news agency Xinhua, further information is yet to come. The rate breaks are to be implemented from March 2023, but consumers also get one-time payments in January and February.
Prices capped to provide incentives
Gas and electricity prices have been capped at only 80 percent of the previous average consumption in order to provide incentives to reduce consumption amid the energy crisis. The German government is providing up to 200 billion euros through the Economic Stabilization Fund to finance the energy price break, which was originally set up to distribute state aid during the COVID-19 pandemic.
inflation relief package of 95 billion euros
Germany also passed an inflation relief package of 95 billion euros this year. The measures include short-term financial support to pay for heating bills during winter and a reduction in the value-added tax (VAT) rate on gas and district heating from 19 percent to 7 percent.
News Reels
Despite the relief measures, consumer prices of energy products were still 38.7 percent higher in November than the same month a year earlier. According to new official data, the rate of inflation eased to 10.0 percent last month, after reaching a peak of 10.4 percent in October.
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