Price increase: Olaf Scholz promises new aid package for private individuals

The Chancellor wants to protect the poorest households from the rising energy prices expected in autumn.

Chancellor Olaf Scholz on Thursday promised a new aid package for individuals in the face of rising energy prices, which are set to worsen this autumn, while reaffirming his commitment to a return to fiscal discipline next year. “We will do everything to ensure that the citizens get through this difficult time,” said the Social Democrat at his first summer press conference, which his predecessor Angela Merkel had made a tradition.

If the plan affects all sections of the population, it will focus on the most modest households, with tax cuts or housing subsidies, the Prime Minister, who has been in office since December, said without going into detail. He also did not specify the deadline and cost of the package.

At the same time, he reaffirmed his commitment to complying with the constitutional rules of budget discipline again in 2023 after a three-year exception in view of the Covid 19 pandemic. “We assume that we can realize our projects within the current financial framework,” he said. Some voices, particularly within the pro-government Greens and the SPD, have called for the suspension of the “debt brake” to be extended in the event of a sharp deterioration in the German economy.

A rise in energy prices in the fall

Growth remained flat in the second quarter, weighed down by the acceleration in post-war inflation in Ukraine. This is one of the worst performances in the euro zone from April to late June. And autumn and winter promise a scare for the most important European economies because of the energy crisis “still imminent for the economy”, explained Economics Minister Robert Habeck. Above all, the heating and electricity bills of the Germans will skyrocket in the fall due to the federal government’s decision to be allowed to pass on the energy price increase to the end consumer.

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The day before, Germany’s finance minister, the liberal Christian Lindner, had announced a series of €10 billion tax measures for 2023 to cushion the price surge following Russia’s invasion of Ukraine. Germany has already provided EUR 30 billion in aid to relieve individuals, Olaf Scholz recalled, including discounts at the gas pump or the popular EUR 9 ticket, which allows you to travel on public transport and regional trains for a month. However, the measure ends at the end of August.