German government to support industrial companies over high electricity prices

The German government will support industrial companies over high electricity prices, agreeing on a five-year package of measures. Chancellor Olaf Scholz said today that companies would receive relief of up to 12 billion euros (over CZK 295 billion) next year alone, Reuters reported. The measures are being financed under the so-called debt brake, Finance Minister Christian Lindner said.

The plan includes a substantial cut in electricity tax to the minimum level permitted in the EU. According to the announcement, all businesses are expected to benefit, not just those that have so far received compensation for high electricity consumption during peak periods. Existing compensation for 350 companies facing exceptional international competition will be extended and expanded.

The German government agreed on the measures after months of disputes within the governing coalition over how to ensure that German industry remains competitive amid high energy costs.

The debt brake is a measure enshrined in the constitution that prevents the country from taking on excessive debt. After the agreement was announced, shares in German chemical companies began to rise on stock exchanges.