Germany set to announce around 40 billion euro aid package


German Chancellor Olaf Scholz’s coalition has sealed a relief package worth around 40 billion euros ($40 billion) to help millions of households cope with soaring electricity prices in the amid Europe’s most severe energy crisis in decades, a person familiar with the matter said.

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German Chancellor Olaf Scholz’s coalition has sealed a relief package worth around 40 billion euros ($40 billion) to help millions of households cope with soaring electricity prices in the amid Europe’s most severe energy crisis in decades, a person familiar with the matter said.

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Federal consumer assistance funding is expected to cover the remainder of 2022 and 2023, and the overall package will be even larger due to contributions from regional governments, the person said.

A government spokesman could not immediately be reached for comment. The government said earlier on Sunday it would provide details of the package by 11 a.m. local time.

Germany is facing a spiraling energy crisis triggered by Russia’s decision to virtually halt gas deliveries through the Nord Stream 1 pipeline following its war with Ukraine and international sanctions.

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The German government has activated the second stage of its three-tier gas contingency plan and is considering easing several of its fundamental energy and environmental policies to mitigate the fallout, including extending the life cycle of its nuclear power plants and coal.

The impact of war

Soaring energy prices and multiple shifts in Germany’s policy toward Ukraine became major liabilities for Scholz in his first year as chancellor, his popularity rankings falling. collapsing.

His party has already suffered electoral defeat since Russia started the war in Ukraine, underscoring how quickly inflation has become the biggest challenge for governments across Europe.

The package will be Scholz’s third since taking office less than 10 months ago. The two previous ones were worth more than 30 billion euros.

A likely element of the new relief is a measure, presented by Finance Minister Christian Lindner in early August, to provide tax adjustments worth around 10 billion euros.

The measure is said to be an attempt to ease people’s burden of so-called ‘bracket creep’, in which people are pushed into higher tax brackets because they receive a pay rise to offset inflation fast.

(Add likely package component in last paragraph)

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