Germany: the government releases a massive aid plan against soaring prices

The German government agreed on Sunday on a new plan to help purchasing power and businesses, in the context of high inflation, through measures totaling 65 billion euros, according to a draft agreement consulted on Sunday by AFP.

“Rapid and proportionate aid to citizens and businesses is necessary due to the rapid increase in energy prices”, explains this document, which was drawn up after weeks of painstaking discussions between the three parties of the Social Democratic Chancellor’s coalition. Olaf Scholz.

The head of government must present the catalog of measures at a press conference from 11 a.m. (9 a.m. GMT).

The Social Democrat, at the head of a coalition formed with environmentalists and liberals, had met on Saturday, until late in the evening, the main figures of the government to finalize this plan.

The aid includes a check paid to students and retirees as well as an increase in housing allowance, according to the document.

Inflation rose again in Germany in August, to 7.9% year on year, still driven by soaring energy prices in the wake of the war in Ukraine.

In October, a tax on gas intended to avoid the bankruptcy of German energy groups must come into force. It will lead to a further increase in household energy bills, by several hundred euros.

The head of Germany’s central bank, the Bundesbank, has said inflation is likely to hit 10% by the end of the year, a first since the 1950s.

As in other European countries, the rise in prices is fueling public concern and calls for demonstrations, mainly at the initiative of the far right or the far left, are worrying the government.

Since the beginning of the Russian invasion of Ukraine at the end of February, the government of Olaf Scholz has already released two trains of household aid totaling some 30 billion euros.

Some of these measures have recently expired, such as the fuel discount and the popular €9 per month season ticket on all public transport, excluding high-speed lines.

The announcement of this new plan negotiated since the beginning of the summer has been postponed several times, illustrating the friction between the three parties of the coalition in power for nine months.


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