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"Double-boom" from the Chancellor: Ursula von der Leyen warns of market distortion

2022-10-07T12:15:59.362Z


Germany wants to cushion high energy prices with 200 billion euros - other countries cannot afford it. The President of the EU Commission warns: There should only be competition through quality, not through subsidies.


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Ursula von der Leyen in Prague: Everyone should have the same opportunity in the internal market

Photo: IMAGO/Ondrej Deml / IMAGO/CTK Photo

The Chancellor's "double boom" is intended to relieve the burden on citizens and companies in Germany - but the European neighbors have sharply criticized the plans.

After the German push to cushion energy prices, EU Commission President Ursula von der Leyen has now warned of a distortion of the common internal market.

It is important that all companies have the same opportunities to participate in the internal market, said the German politician on the sidelines of the EU summit in Prague.

There should only be competition based on quality, not subsidies.

Germany wants to cushion the high energy prices by 2024 with up to 200 billion euros.

Scholz had described the planned measures as "double boom".

However, several EU heads of state and government have recently criticized the package.

(Read more about this here.) Poland's Prime Minister Mateusz Morawiecki, for example, sent a direct message to Germany.

"My message to Germany is: be united, show solidarity with everyone else," said Morawiecki in Prague.

In difficult times, everyone must agree on a common denominator and not on the denominator that is only suitable for one country.

Austria's Chancellor Karl Nehammer on Friday, on the other hand, described the German package as a "wake-up call to the European Commission" and called for a European solution.

“If the Commission doesn't get going, then the nation states will start to help themselves.

And that's what we're seeing right now."

A European solution, especially in the fight against high gas prices, has so far been a long time coming.

Also because Germany is reluctant to an EU-wide gas price cap demanded by many countries.

Instead, the federal government now wants to launch a national program.

Government wants to justify defense shield with dangers to the economy

According to a report, the federal government justifies the package with an otherwise imminent economic downturn and serious upheavals in the economy.

The defense shield is necessary to "cushion serious economic damage," the newspapers of the editorial network Germany (RND) quote from a draft law on the planned reallocation of the Economic Stabilization Fund (WSF).

The volume of 200 billion euros is "considerable", but measured in relation to the size and performance of the economy and sustainable in the long term, according to the draft, which was also available to the dpa.

A reprioritization of existing measures in the federal budget is not possible in view of the other measures that are still necessary to mitigate the consequences of the corona pandemic and the Russian war of aggression.

On Friday, the Ministry of Finance submitted a draft for upgrading the Economic Stabilization Fund to the departmental vote.

The WSF as a special fund is intended to cushion the consequences of the energy crisis in the future, in particular price increases for gas and electricity in Germany, as stated in the draft.

The aim of the package of measures is to "stop the downward spiral that would otherwise occur," quoted the RND.

According to the newspapers, the federal cabinet will deal with the bill next Monday.

This date is necessary in order to complete the legislative process before the end of this year.

The cabinet does not meet again until Wednesday.

ani/dpa

Source: spiegel

All business articles on 2022-10-07

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