Germany will spend more than 18 billion on energy subsidies in just 5 months!

Germany will spend more than $18 billion on its lavish electricity price cap and transmission grid subsidies until May this year, according to a German government document seen by Reuters.

The electricity price cap will cost Germany a considerable sum, estimated at 14.5 billion euros, equal to 15.75 billion dollars, and this only for the month of May. On top of these costs, Germany will spend another 2.14 billion euros subsidizing the costs of transmission networks in the next two months alone, Finance Secretary Florian Toncar said in a letter sent to the lower house budget committee on Tuesday. of the Parliament.

The electricity price cap – a measure taken to relieve extreme price pressure on electricity consumers – will be financed entirely by the German government. The costs of the electricity plan – which runs until April 2024 – are expected to far exceed the $18 billion that will be spent through May alone.

The spending plan must now obtain approval from the budget committee of the German parliament, expected on Wednesday. In November, Germany drew up a plan to spend $82.8 billion to finance the electricity price cap for all of 2023. But even that is only a fraction of the $199 billion "defense shield" dollars that Germany has declared it intends to deploy to help consumers and businesses cope with high energy costs.

Of course, Germany could end up spending less than initially anticipated if energy prices stay lower than expected. Energy prices are lower than when the plan was conceived in early fall of last year.

The mild weather that characterized much of this year, natural gas inventory levels and weak Asian demand kept benchmark gas prices in Europe much lower than expected.

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The article Germany will spend more than 18 billion on energy subsidies in just 5 months! comes from Economic Scenarios .

This is a machine translation of a post published on Scenari Economici at the URL on Wed, 25 Jan 2023 08:00:17 +0000.