Gas, that’s who will be covered by the Scholz 200 billion umbrella
The 200 billion anti-gas price shield announced by Scholz will not only cover disadvantaged citizens and businesses, but above all the medium-high level subjects. Here are numbers and details
Germany fears a landslide in its middle class due to the energy crisis and the core of the measures that Olaf Scholz's government is gradually announcing to implement the 200 billion defensive shield are aimed at supporting citizens and businesses that form the backbone of society and the German economy.
A systemic defense shield, Chancellor Olaf Scholz defined it more than a month ago, when he announced the 200 billion plan that infuriated more than half of Europe, in the face of the defeat that Germany has in fact suffered on the energy front with the end of the privileged relationship with Russia based on the purchase of low-cost energy. The country is preparing for recession, fears a long-term crisis, the press talks more and more often about the risks of de-industrialization. Dark scenarios return that had not been designed since the early 2000s, when Germany was considered the sick man of Europe. For this reason, the government's billionaire umbrella aims to repair not only and not so much the weakest groups: this explains the gigantic size of the sum made available, but also the small rebellion that Scholz is allowing himself against the USA on the side of relations. with China.
This is clarified by a study by the IW economic research institute in Cologne, according to which the planned brake on the price of gas would considerably benefit the middle class and the highest incomes. Poor families and the lower middle class would receive the most relief in percentage terms of their income, but in absolute terms about three-quarters of the billions committed would go to the upper income groups. The hypothesis was formulated by Rhenish economists in a research commissioned by the Bavarian Business Association (Vbw), and presented in Berlin last weekend.
As the ways in which this form of support will materialize have not yet been fully and accurately determined and gas prices will also change over the next year, the Cologne Institute's calculations are based on assumptions. In a sample calculation, the distribution effect that the gas price brake would have this year if it were already in place was determined. For a basic consumption of up to 8,000 kilowatt hours of gas per year, scientists have assumed a maximum price of 7.5 cents per kilowatt hour and, above this, an average market price of 15.2 cents. According to the simulation calculations of the IW, a brake on the price of gas would cause costs of 11.7 billion euros in the hypotheses described above, of which just under 2.9 billion would go to poor families and the lower middle class.
Meanwhile, just yesterday, the Reuters agency revealed that Germany will spend 83.3 billion euros, or 42% of the 200 billion protection plan, to finance a cap on gas and electricity prices in 2023 in an attempt to protect the first European economy.
Another highly symbolic measure just announced by the government, has clear beneficiaries in that segment of the population that has medium-high incomes: the monthly pass for public transport, heir to the 9 euro ticket that in the summer had pushed over 30 million Germans to move from private to public transport. A measure to stem the expensive fuel but also to support a new concept of mobility.
Except that 9 euros was an unsustainable cost in the long run to finance an efficient public transport network. Thus the new compromise point reached between the federal government and the governments of the Länder fell on the figure of 49 euros per month, which is not exactly a price for the poor class. It will be valid, like its predecessor, for urban public transport in all German cities (ie you can go on buses and subways in Berlin, Munich, Frankfurt, Hamburg and any other German city) and on regional trains. Excluding, as it was also in the summer, the Intercity and the high-speed Ice. According to the agreement, both parties (federal government and Länder) will allocate 1.5 billion euros per year for financing. The ticket, called “Deutschland-Ticket”, will cost just 49 euros per month and will be available from next year, perhaps from March given the complex implementation times of the measure. Many observers believe that this price is attractive for the upper middle class, much less for low-income or subsidy recipients (at least for those who do not also include a public transport pass).
So much so that the Land of Berlin, unlike what is believed to be one of the poorest in Germany abroad and with a higher rate of Harz IV subsidies, has autonomously decided to extend it for the first three months of 2023 the current 29 euro monthly ticket (valid only for the urban transport of the capital) and to hypothesize when the national 49 euro ticket will be in force, reduced forms to 9 or 29 euro for the economically disadvantaged groups. The city administration will naturally have to find the financial resources to do this, and it will not be easy.
The one who has money to add to the federal one is Bavaria. The government of the Bavarian Land (which also in its name – Free State of Bavaria – betrays its distinction from the rest of the German Länder) wants to mitigate the consequences of the energy crisis in the next year with its own extraordinary fund of 1.5 billion euros. And the decision was made by the cabinet during a full-day budget meeting held exceptionally on Sunday (November 6).
Among the measures announced, support for small and medium-sized enterprises, but also for welfare and social associations and institutions. However, as President Markus Söder (CSU) stated after the closed-door meeting, support will also go to other categories affected by the rising heating prices, in particular those using oil or pellets. The goal – added Söder – is to integrate federal aid programs and fill the gaps. But the president also added that if the money is not enough, there is still "room for maneuver" and, if necessary, the budget can still be changed: "We will not leave anyone alone," Söder said.
In addition to the current fund for energy difficulties, the development bank LfA will offer extended guarantees to companies in financial difficulty, for a total of 500 million euros. In short, even in Monaco and its surroundings the network extends to the medium-high range of society.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/germania-scudo-200-miliardi-ceto-medio/ on Tue, 08 Nov 2022 06:36:00 +0000.