German Government Agrees To Provide 65 Billion Worth Relief Package
Against the backdrop of rising energy prices, the German government has agreed in principle to provide 65 billion worth of relief package to the households. The Chancellor of Germany said that we (as a country) would get through these winters.
These 65 billion roughly equate to around $64.7 billion (USD) and will be used to ease some of the inflation pressure amid rising energy costs. After the energy supply disruption from Russia, the energy costs in Germany and all over Europe have risen significantly.
Around 33% of the relief measure will be used for providing subsidized tickets for public transport and for providing tax breaks to the affected companies. Only those companies which have high energy intensive will qualify for the tax breaks.
What Does It Mean For German Households?
Currently, the inflation in Germany is around 8% and is slightly lower than the values witnessed in June and July. However, it is still high, and that's one of the reasons why the government decided to introduce new measures.
The sector which has contributed greatly to inflation is the energy sector. The Russia-Ukraine war, sanctions, and the subsequent disruption of gas from Russia have increased the problems for Germany.
Germany as a country was highly dependent on Russian gas, just like the rest of its European allies. But it seems that the German government will have to make some alternative plans really fast as the winter is fast approaching.
German consumers are also experiencing high inflation in the groceries sector as well. In June, the prices of groceries increased by 12%, and in August, the increase was a staggering 16.6%!
Earlier, a German citizen could get a travel ticket for a whole month for only 9 euros. But that facility expired by the August end (only lasted for around 3 months).
Now that the winter is only a few months away, it would remain an important question how Germany will make it through the winter without Russian gas.