Germany to spend €200 billion to tackle high energy prices

Germany's Olaf Scholz government has said that it will spend €200 billion to tackle the high costs of gas, which is needed to generate power, heat homes and other purposes. The objective would be to help the consumers withstand the high costs and encourage businesses to cope with high energy prices.

The government announced on Thursday that money would be infused into the economy by injecting €200 billion. The war in Ukraine has led to a situation where Russian energy prices have shot up, and Germany has to reinvest into the economy to help the people fight the high prices.

The government's pitch to the citizens is that help will come through the "defensive shield." During the global recession and the Covid pandemic, the German government used the "defensive shield" to create a cushion for ordinary citizens.



Gas is an essential commodity in Germany, and it is used to heat homes during winter, produce electricity and help provide power to factories.

The government had earlier planned to levy a surcharge on the citizens to bring down the rising cost of purchasing fuel on the global market, but it is now being scrapped.

Instead of the surcharge, the government would pump €200 billion. This investment is Germany's idea of fighting back against Russia. Germany won't be cutting taxes like the UK and weakening the currency in the bargain.

FAQs

1. Who is Germany supporting in the Russia-Ukraine War?
   Ukraine.
2. How much of Germany's gas import was from Russia before the war?
   55%