Steven Arons

Birgit Jennen

Bloomberg

German Chancellor Olaf Scholz’s coalition agreed on a relief plan worth about 65 billion euros ($65 billion) to help millions of households struggling with soaring prices amid Europe’s harshest energy crunch in decades.<div class="paywall-selector"></div><div class="paywall">



Key measures include a vow to cap—and even redistribute—huge profits made by energy companies on the back of the current crisis; increased payments to pensioners, students, parents and the unemployed; and actions to rein in the astronomical pace at which electricity prices are rising.



The measures are “a substantial, big step to provide relief to citizens,” Scholz said at the press conference he held at the chancellery in Berlin to present the deal. The crisis is “Putin’s responsibility,” he said in reference to the Russian president and the war in Ukraine.



Germany has been facing a spiraling energy crisis ever since Russia’s decision to all but shut down gas deliveries through the Nord Stream 1 pipeline in the wake of its attack on its neighbor and the heavy sanctions the international community subsequently imposed. Friday, Gazprom announced it&nbsp;<a rel="noreferrer noopener" href="https://www.bloomberg.com/news/articles/2022-09-02/gazprom-says-nord-stream-to-remain-shut-after-technical-issue" target="_blank">would not restart</a>&nbsp;the pipeline as planned after three days of maintenance.&nbsp;



The German government has reacted by activating the second stage of a three-level gas emergency plan, and it’s considering relaxing several of its core energy and environmental policies to mitigate the fallout, including extending the operation of nuclear and coal power plants it had planned to close.



Germany also promised to support a European Union effort to rein in profits at energy companies that is currently under discussion. Such a move would create “financial leeway” that could be used to soften the blow from rising prices on European consumers, the government said.&nbsp;



The German vow comes ahead of an emergency meeting by the bloc’s energy ministers next Friday. Other measures that the meeting will discuss include a price cap on power generated from renewables, coal and nuclear.



The latest package presented by the German government is the third since Scholz took office in late 2021 to help consumers and companies cope with rapid inflation. The total relief now stands at more than 95 billion euros and will lead to “significant additional expenditures in the federal budget,” the government said on Sunday.&nbsp;



The figure of 65 billion euros the government unveiled Sunday to deal with the crisis includes contributions from the federal government, states and municipalities. The federal component of the latest plan is about 40 billion euros, a person familiar with the matter said earlier.&nbsp;



The government said it has submitted a draft budget to Parliament that keeps next year’s spending within the constitutional limits on public borrowing set by Germany’s so-called debt brake. It said the “limited financial wiggle room” of the budget will require “substantial efforts by all three coalition partners” and the government agencies.



One other element of Sunday’s package is the promise to continue offering a subsidized ticket for nationwide rides on public transportation now that the wildly popular 9-euro summer ticket has expired. The new version will likely cost somewhere between 49 euro and 69 euros, the government said.



Here are some of the key measures in the new package:



<ul><li>Support for EU wide profit cap on energy companies.</li><li>Brake on prices for electricity used for basic consumption.</li><li>Subsidies to dampen electricity grid prices.</li><li>Delay to 2024 a previously planned. increase in carbon emission prices.</li><li>One-time lump sum payment of 300 euros for pensioners.</li><li>One-time lump sum payment of 200 euros for university students.</li><li>Increase in rent subsidy payments.</li><li>Increase in welfare payments by 500 euros.</li><li>Increase in child benefits by 18 euros per kid.</li><li>Change to income tax brackets to avoid bracket creep.</li><li>Expansion of various KfW program to support cash-strapped companies.</li><li>Continue to offer subsidized public transportation tickets.</li></ul>



— With assistance by Ewa Krukowska</div>

Chancellor Olaf Scholz called the energy crisis "Putin’s responsibility" in reference to the war in Ukraine.

Germany responds to energy crisis with $65 billion relief package

Sign up for the <a href="https://mynewsletters.fortune.com/fortune-features">Fortune Features</a> email list so you don’t miss our biggest features, exclusive interviews, and investigations.

F-Wire

energy

Politics

Germany announces $65 billion ‘relief to citizens’ package amid soaring energy prices

Germany responds to energy crisis with $65 billion relief package | Fortune Europe

Ryan Hogg

Elon Musk listens as U.S. President-elect Donald Trump addresses a House Republicans Conference meeting at the Hyatt Regency on Capitol Hill on November 13, 2024 in Washington, DC.

Elon Musk accused of trying to weaken Europe with support for far-right AfD party

/europe/2025/01/02/elon-musk-accused-trying-weaken-europe-support-far-right-afd-party/

Billion-euro blow for Hungary’s Orban as frozen EU funds are lost

/europe/2025/01/02/billion-euro-blow-hungary-orban-frozen-eu-funds/

Eastern Europe fumes as Zelensky pulls plug on Russian gas transit to Europe via Ukraine

/europe/2025/01/02/eastern-europe-fumes-zelensky-pulls-plug-russian-gas-transit/

‘Only the AfD can save Germany’ says Musk as he praises the far-right in move to sway German elections

/europe/2024/12/31/afd-elon-musk-far-right-sways-german-elections/

Kremlin threatens retaliation as European Telegram ban of Russian state media sparks outrage

/europe/2024/12/30/kremlin-threatens-retaliation-europe-telegram-ban-russian-state-media/

Iain Rogers

German President dissolves parliament and calls February 23 election

/europe/2024/12/27/german-president-dissolves-parliament-and-calls-february-23-election/

Fortune Editors

Fortune Europe provides smart and timely business news in European markets.

Uncategorized

homepage

Fortune Europe

Finance

Lifestyle

Retail

Tech

Paolo Confino

Elon Musk eyes a deal with his native South Africa to let SpaceX offer Starlink service in exchange for a Tesla battery plant, report says

https://fortune.com/2024/12/30/elon-musk-spacex-starlink-deal-south-africa-tesla-battery-plant/?itm_source=parsely-api

Orianna Rosa Royle

Meet the rich retired boomers who are now ultra-frugal because they are scared of going broke—even after saving for decades

https://fortune.com/2024/12/31/rich-retired-boomers-fear-going-broke-study/?itm_source=parsely-api

Sydney Lake

Steve Jobs adopted a no ‘bozos' policy and said the best managers are those who never wanted the job—here are his 3 best management tips

https://fortune.com/article/steve-jobs-management-quotes-advice-apple/?itm_source=parsely-api

Amazon CEO Andy Jassy: An ‘embarrassing’ amount of your success in your 20s depends on your attitude

https://fortune.com/article/amazon-ceo-andy-jassy-success-20s-attitude-gen-z/?itm_source=parsely-api

Walmart is selling a $78 dupe of the Hermès Birkin bag that fans say is so realistic it makes the expensive one obsolete

https://fortune.com/2024/12/31/walmart-birkin-bag-dupe-kamugo-hermes/?itm_source=parsely-api

Chris Morris

Here's what stores are open (and closed) on New Year's Day 2025

https://fortune.com/2025/01/01/stores-open-closed-new-years-day-2025-grocery-retail-store-hours/?itm_source=parsely-api