Germany’s government expects to receive a large revenue boost by tapping windfall profits generated by energy companies if they keep benefiting from disruptions in Europe’s electricity market, German Chancellor Olaf Scholz said on Sunday.
Germany will take in “many, many billions” of euros under the scenario and would use the revenue to help consumers affected by rampant inflation, Scholz said in an interview with broadcaster ZDF.
The government will use “earnings that exceed a threshold at companies that don’t have such high production costs and give it back to the citizens,” Scholz said.
Photo: AP
He also expressed confidence that Europe’s biggest economy would not face power blackouts.
The German government earlier on Sunday presented a 65 billion euro (US$64.5 billion) package to help citizens and companies cope with surging energy prices. The agreement, which brings total relief to almost 100 billion euros since the start of the Ukraine war, was hammered out overnight by Germany’s three-way ruling coalition of the Social Democrats, the Greens and the Free Democratic Party.
The government promised to support an EU effort to introduce levies on windfall profits as surging earnings at some energy companies amid rising electricity prices cause public outrage.
Germany has faced an energy crisis since Russia decided to all but shut down gas deliveries through the Nord Stream 1 pipeline in retaliation for Western sanctions imposed after Russian President Vladimir Putin’s invasion of Ukraine.
The decision by Russian supplier Gazprom PJSC on Friday not to restart the pipeline as planned after three days of maintenance has deepened the crisis. Europe is bracing for energy rationing this winter and perhaps even electricity blackouts.
Scholz told ZDF that his government is doing everything possible to prevent blackouts.
“I am also very certain” that such a scenario would not unfold this winter, he said.
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