Inflation: Germany will spend 65 billion euros to cushion the impact of the spiraling cost of living on households and businesses

Germany will spend at least 65 billion euros to protect consumers and businesses from rising inflation, Chancellor Olaf Scholz said yesterday, two days after Russia announced it would indefinitely suspend some gas supplies.

Measures include power increases and a public transport subsidy to be paid from a tax on electricity companies, and by Germany bringing forward the implementation of the planned 15% global minimum corporate tax.

A portion of the proceeds would be used to offer €1.7 billion in tax breaks to 9,000 energy-intensive companies, a government document showed.

Russia’s invasion of Ukraine in February has fueled global inflation and prompted warnings of social and economic turmoil as the world weans itself from cheap energy and flexible global supply chains.

In Germany, where annual inflation stood at 7.9 percent in August, the effect was amplified by Russia’s reduction in the amount of gas pumped into the country.

“Russia is no longer a reliable energy partner,” said Scholz at a press conference.

Gas storage reached 85 percent capacity on Saturday, almost a month ahead of schedule, thanks in part to reductions in consumption by corporate customers.

But while stocks are sufficient, the government must help protect consumers and businesses from the higher costs, he said.

“You’ll never walk alone,” he added, switching to English to recite a song notoriously adopted by fans of English football club Liverpool.

The latest package amounts to 95 billion euros that have been allocated to fight inflation since the start of the Ukraine war in February.

https://www.independent.ie/business/world/inflation-germany-to-spend-65bn-cushioning-impact-on-households-and-business-of-cost-of-living-spiral-41960732.html Inflation: Germany will spend 65 billion euros to cushion the impact of the spiraling cost of living on households and businesses

Fry Electronics Team

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