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BRUSSELS, Oct. 4 (AP) Germany’s plan to spend billions of euros to help its consumers and businesses keep natural gas prices low has been met with a lukewarm reception from the rest of the European Union and some fear the measure could intensify energy crisis.
With a recession looming, Prime Minister Olaf Schultz said last week that his government would spend as much as 200 billion euros (dollars) on “gas price brakes”.
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Some EU countries believe the move by the bloc’s largest economy should be coordinated with them.
They said they were concerned it would drive up prices elsewhere.
European economies are already struggling to recover from the coronavirus pandemic, but high inflation and Russia’s war in Ukraine, especially its decision to shut gas taps in several EU countries, have dealt them a fresh blow.
According to some opponents of the German plan – among them France and Italy – the solution should be greater solidarity among EU partners and greater use of EU funds, rather than a solitary national effort.
“If we want to avoid division, if we want to face this crisis, I think we need a higher level of solidarity, we need to develop some further universal tools,” Economics Commissioner Paolo Gentiloni told the EU financial conference Minister of Luxembourg.
But he was careful not to point the finger directly at Germany.
Dutch Finance Minister Sigrid Kaag agrees that measures to tackle the energy crunch need to be coordinated across the 27 member states, but she opposes the creation of any new EU fund to meet the challenge.
Kager told reporters that the EU already has several “billions of dollars available that could be fully tapped in the first place.” “We need to steer what we have and invest in the right way.”
The Dutch government on Tuesday also unveiled details of a planned cap on energy prices for households, as well as an outline of a subsidy system designed to ease the pain of small and medium-sized businesses that use a lot of electricity.
German Finance Minister Christian Lindner said there was “a misunderstanding” about what he called “our shield of protection”.
“Our measures are targeted,” Lindner told reporters.
“We have to change the order of the electricity market, but our package is not disproportionate. In fact, if you compare the size and vulnerability of the German economy, it is proportionate.”
Czech Finance Minister Zybnek Stanjura, who chaired the meeting, acknowledged that opinions on the best way forward vary widely. “Different member states have different energy mixes, so they have different ideas about what needs to be done first,” he said.
The issue is likely to be discussed again at a summit of EU leaders in Prague on Friday, with the war in Ukraine and its economic impact on Europe at the top of the agenda.
But the chances of a breakout this week seem slim.
“None of us foresaw this. We don’t know how long this will last, the long-term impact on the economy,” Kager said.
“So, coming out of the Covid-19 pandemic, we need to act appropriately without unintentionally fueling inflation. That’s the kind of tight rope we walk or dance on.” (The Associated Press)
(This is an unedited and auto-generated story from the Syndicated News feed, the body of the content may not have been modified or edited by LatestLY staff)
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