All the tensions between Berlin and Brussels on energy
Berlin fears the EU's halt to the subsidized electricity price for industry, one of the central promises of the first phase of the Merz government. Negotiations underway with Brussels. The point
The German government is seriously concerned that the European Commission may block one of the central projects of its economic strategy: the introduction of a preferential electricity price for industry . This is reported by the business daily Handelsblatt, which has obtained access to an internal note classified as "confidential", drawn up by experts from the Ministry of Economics. The document signals the concrete possibility that Brussels will reject the initiative, judging it to be in breach of state aid rules.
The news represents a potential blow to Chancellor Friedrich Merz and Vice Chancellor Lars Klingbeil, who see the measure as essential to halt Germany's industrial decline and support economic recovery.
A PILLAR OF GERMAN ECONOMIC STRATEGY
The plan to impose a cap on electricity prices for energy-intensive companies – such as those in the steel, chemical and glass sectors – is one of the cornerstones of the new economic policy of the Union-SPD coalition government. The measure, strongly supported by the Minister of Economics Katherina Reiche (CDU), aims to counter the loss of competitiveness of German companies, which have long been penalised by high energy costs. In recent years, many companies have transferred part of their production abroad, attracted by more convenient tariffs in other countries, with tangible consequences for employment and domestic investment.
The proposal was developed by the ministry's experts and submitted to Minister Reiche at the end of last week. And the minister herself announced it in her first public interview with the Handelsblatt.
However, the document is accompanied by strong reservations: the implementation of the plan, the note states, presents "significant critical issues within the framework of EU rules on state aid". Resistance within the European Commission would in fact be "significant", and the chances of obtaining a green light are described as "highly uncertain".
THE GOVERNMENT'S COMMITMENT AND THE MARGINS OF MANEUVER
Despite the difficulties, the German government does not intend to give up on the project. Reiche confirmed the executive's commitment to implement a series of measures aimed at reducing the cost of energy for industry, declaring that "we must now quickly implement all the measures planned to reduce the level of electricity prices: we will lower the electricity tax to the minimum level provided for by European law, we will apply reliefs on network tariffs and levies, and we will also discuss with the European Commission an electricity price for industry". However, she herself acknowledged that the road will be uphill, since "for reasons related to state aid rules, it will not be easy".
During a meeting in Berlin earlier this week with the Executive Vice President of the European Commission Teresa Ribera Rodríguez, the minister reiterated the need for constructive dialogue with Brussels. The aim is to ensure a sustainable cost threshold, without compromising the balance of the European internal market. Ribera, for her part, assured institutional “full cooperation”, while specifying that the merits of the individual measures have not yet been explored. In the meantime, sources at the ministry report that Reiche has not yet officially approved the operational proposal, and the ministry has preferred not to comment publicly on the state of negotiations.
BALANCE BETWEEN PRAGMATISM AND ENVIRONMENTAL GOALS
Katherina Reiche stressed that urgent measures to reduce energy prices do not mean that Germany will backtrack on its climate goals. “Climate protection remains a key objective: we are aiming for climate neutrality by 2045,” she said in the interview with the business daily, adding, however, that achieving this goal requires “strong pragmatism.” In particular, she reiterated that “security of supply and affordable prices must return to the center of energy policy,” highlighting the need to support the industry in this transition phase.
RACE AGAINST TIME
The German government is aware that the scope for action is rapidly shrinking, the Handelsblatt concludes. Ministry officials warn that “time is running out” and that the plan must be agreed with Brussels “as quickly as possible” to avoid further delays. In an increasingly competitive international environment, where many non-European economies can count on more aggressive energy policies and lower costs, Germany cannot afford to be left behind, and the accumulated delays have already caused a lot of damage.
For Chancellor Merz, the success of the industrial strategy depends on the ability to contain energy costs without giving up sustainability goals. The project of the regulated industrial price of electricity represents, in this sense, a decisive test: a difficult slalom in the delicate balance between economic policy, European law and climate ambitions.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/tensioni-germania-ue-prezzo-energia/ on Tue, 10 Jun 2025 05:41:49 +0000.