German chancellor and finance minister criticize plans to subsidize electricity for industry

German Chancellor Olaf Scholz and Finance Minister Christian Lindner are criticizing plans by Germany’s Ministry for Economic Affairs to subsidize electricity prices for industry to ensure its competitiveness against foreign rivals. Both say the way forward is to ensure cheaper electricity generation and avoid a long-term burden on the German budget.

The Ministry for Economic Affairs is currently working on a proposal aimed at reducing electricity prices for energy-intensive industry. According to Economy Minister Robert Habeck, the plan would cap prices using public funds. The background is international competition and concerns that companies could relocate because of high electricity prices.

“The whole economy is currently talking intensively about the price of electricity for industry, and I think we have to do this. … If we cap prices, we will lose money; if we don’t, we could lose the industries of the future,” Habeck said.

Scholz says such a proposal “would not end well”