German Chancellor Olaf Scholz said that the German government approved a set of measures to reduce prices for gas, electricity and heating.
“We are lowering energy prices so that citizens can cope with the new prices and challenges,” Schultz said at a joint press conference with French Prime Minister Elisabeth Born on Friday in Berlin.
He added that the government had been working on these measures in recent weeks and had managed to find an “acceptable solution.”
The measures must be ratified by the Bundestag (German parliament) and the Bundesrat (a meeting of representatives of the German regions) for them to come into effect. These measures are scheduled to be implemented from January to April 2024 and will cost the German government 54 billion euros.
Energy prices are expected to be reduced for private homes and SME projects that consume less than 1.5 GWh per year. The price of gas will be set at 12 cents per kilowatt-hour, the price of electricity at 40 cents per kilowatt-hour, and the price of central heating at 9.5 cents per kilowatt-hour.
Also, from January next year, it is planned to reduce energy prices for industrial facilities.
The activities will be financed as part of a €200 billion state aid package designed to support the population during the energy crisis.
This is happening against the backdrop of rising inflation to record highs in October last year, when it reached 10.4%. The central bank has warned that the German economy is on the verge of a recession.
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