Germany will support companies hit by the energy crisis, widening a pandemic-era aid program to help companies hit by surging costs.
(Bloomberg) — Germany will support companies hit by the energy crisis, widening a pandemic-era aid program to help companies hit by surging costs.
Europe’s largest economy is at the center of the continent’s energy crunch as Russian President Vladimir Putin slashes supplies in retaliation for sanctions related to the war in Ukraine. After the ruling coalition agreed on measures to support consumers, Germany will make funding available to strapped businesses.
“We will open a wide rescue umbrella,” Economy Minister Robert Habeck said Thursday in a speech to lawmakers in Berlin. “We will open it widely so that small and medium enterprises can come under it.”
The criteria for aid could include the relation between energy costs and production expenses or turnover, he said.
Habeck, a member of the Green party who is also vice chancellor, has been under fire on numerous fronts for his handling of the intensifying energy crisis. After bungling a gas levy on consumers, he stoked controversy by suggesting on a television talkshow this week that bakers and other small businesses might cease operations in the fallout from shortages.
He’s pushed back and said money would be made available to help companies weather a surge in costs, with plans to revive a pandemic era fund to provide aid to businesses.
In a parliamentary committee late Wednesday, he signaled that he would consider opening up an already existing fund to more companies, according to a participant in the meeting. So far, only about 20% of the 5 billion-euro ($5 billion) fund had been used up, he said.
Bolstering the fund’s resources could run into issues with constitutional debt limits, Habeck said, according to the participant, who asked not to be identified because the meeting was private.
Habeck has also come under heavy criticism over a plan to keep two of the country’s three remaining nuclear reactors in reserve into next year, instead of shutting them down as planned. The operator of one of those units warned the plant isn’t suitable for backup power.
In his speech in parliament, he indicated that the crisis is likely to last beyond this winter, but said the support for businesses will be temporary as Germany works with European partners to reform energy markets or tap profits from companies benefiting from the crisis.
“We are looking at the electricity market design,” said Habeck. “If this doesn’t work immediately and solidly, then we also consider the option of a windfall levy and give this back to the citizens.”
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