German Chancellor Olaf Scholz has said that his government will spend at least 65 billion euros ($64.7 billion) on protecting customers and businesses from soaring inflation, two days after Russia announced an indefinite suspension of some gas deliveries which are set to further increase energy costs.
Included among the measures agreed by the three coalition parties are benefit increases and a public transport subsidy. The measures are to be funded by a tax on electricity companies and by bringing forward Germany’s implementation of the planned 15% global minimum corporate tax.
The Russian invasion of Ukraine has led to inflation worldwide and prompted warnings of social and economic turmoil as the world struggles with ever-rising energy prices.
In Germany, where year-on-year inflation was running at 7.9% in August, the situation has been exacerbated by Russia’s decision to reduce gas supplies to the country, which has caused larger increases than in other countries.
“Russia is no longer a reliable energy partner,” Scholz told a news conference, adding that his government’s earlier preparations meant that Germany would maintain enough supplies for the winter heating season.
Gas stores were at 85% of capacity on Saturday, almost a month ahead of schedule, thanks in part to corporate consumers cutting consumption.
But while supplies were sufficient, the government would need to help shield consumers and businesses from the higher costs, Scholz added.