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[/url]summary: Announcing the deal, German Chancellor Olaf Scholz said the costs would be worth up to €12 billion in the next year alone. Germany has announced a relief package to support its struggling economy. The package includes tax cuts on electricity for the manufacturing sector, with the relief expected to reach up to €12 billion in the coming year. From 2024 to 2025, the electricity tax for manufacturing will be reduced to the European Union minimum. The lowered tax may be extended for an additional three years. Additionally, energy-intensive companies vulnerable to international competition will have their emissions trading costs reimbursed. This relief package follows discussions between the industry and the German government. High power prices caused by Russian energy supply cuts have affected German exporters' competitiveness.
Why it is interesting/important : The economy ministry has been advocating for an industrial power price cap—basically, an electricity subsidy—for months. However, the finance ministry objected to the enormous expenses and issued a warning about market distortion. Although he referred to the package as "overdue," Peter Adrian, the head of the German association of chambers of commerce and industry, expressed concern that it would be sufficient to guarantee competitive electricity costs for the entire industry. The German economy contracted marginally in the third quarter, and concerns of a protracted slump have increased in light of a recent run of dismal economic data. According to IMF predictions, this year Germany will be the only significant advanced economy to contract.
Ref : wwwdotlemonde.fr/en/economy/article/2023/11/09/germany-unveils-huge-electricity-price-support-package-for-industry_6241070_19.html