Germany announces new energy, inflation relief plan

Germany will invest an additional 65 billion euros in a new round of measures aimed at easing the sting of inflation and high energy prices for consumers, the country’s governing coalition announced Sunday.

“Germany stands together in a difficult time. As a country, we will get through this difficult time,” Chancellor Olaf Scholz said at a Sunday news conference with leaders from the Greens and the pro-business FDP, the two coalition partners of his center-left Social Democrats.

Among the measures announced Sunday are additional one-time payments to help consumers cover energy costs, a planned price cap on a basic amount of energy consumption for families and individuals, and a successor to the country’s popular “9-euro ticket” for nationwide public transit.

Scholz said he’s “very aware” many Germans are struggling to cope with the rising prices and that the government is prepared to help. “We take these concerns very, very seriously,” he said.

In addition to the previously announced one-off 300-euro payments for workers to help offset energy costs, the government plans to offer one-time payments for other groups. Retirees will receive 300 euros, for example, while students will receive 200 euros.

To keep energy costs lower for individuals and families, the government announced a “price brake” on energy prices, saying it plans to offer a to-be-determined basic amount of energy to all at a lower rate.

The government will also develop a successor to its “9-euro ticket,” a nationwide ticket allowing unlimited travel on local and regional public transit. The 9-euro-per-month ticket was announced for three months at the beginning of June as part of a government program intended to help combat high inflation and fuel prices.

Chancellor Olaf Scholz (SPD, 2nd from right), joins Omid Nouripour (l), federal chairman of the Green Party, Saskia Esken (r), federal chairman of the SPD, and Christian Lindner, FDP federal chairman and federal minister of finance, arrive at the press conference following the deliberations of the SPD, Greens and FDP in the coalition committee. The coalition committee of the traffic light alliance has agreed on a new relief package for citizens.

Although officials did not announce the new monthly price for this ticket going forward, the agreement released by the coalition pointed to suggestions of 49 euros or 69 euros and said it aims to offer something in this range.

Additional measures planned as part of the package include higher subsidies for families with children, a reform of housing subsidies and larger payments for low-income individuals receiving government aid.

Scholz’s government has faced pressure in recent weeks to indicate how it planned to follow through on its promise to help consumers shoulder the costs of inflation and higher energy prices.

In addition to rising wholesale prices for natural gas caused by Russia’s invasion of Ukraine earlier this year, German consumers will have to pay a new surcharge to prop up energy companies scrambling to find new supplies on the global market.

Back in July, when the government first began implementing measures to head off an energy crisis, Scholz promised to ease the sting on consumers, saying “you’ll never walk alone.”

In recent weeks, the government had announced other actions to aid consumers, including the one-time payments of 300 euros for workers and lowering value-added tax on gas from 19% to 7% until the end of March 2024.