German inflation-relief package to amount to €13b in 2022

German inflation-relief package to amount to €13b in 2022

With year-on-year inflation running at 7.9 per cent in August, Berlin has been under pressure to provide further aid for consumers and businesses hit by a surge in energy prices. — Reuters pic

Thursday, 08 Sep 2022 8:13 AM MYT

BERLIN, Sept 8 — Germany’s relief package to help citizens and companies cope with soaring inflation will amount to €13 billion (RM58.4 billion) this year, of which the federal government will contribute 12 billion, the finance ministry said yesterday.

With year-on-year inflation running at 7.9 per cent in August, Berlin has been under pressure to provide further aid for consumers and businesses hit by a surge in energy prices.

Aid for 2023 will amount to around €42.5 billion, of which €24.6 billion will come from federal coffers, according to a ministry breakdown of the package announced on Sunday.

A one-off payment of €300 for pensioners would eat up almost half of the promised relief for 2022, amounting to €6 billion, while energy-intensive firms would get a total of €3 billion over this year and next, the document showed.

Some €8.5 billion in 2022 and 2023 will go towards reducing value-added-tax on gas consumption.

Some €10.1 billion, the biggest part of the allocated funds, will be dedicated in 2023 to raising income tax thresholds in response to inflation, as outlined in August.

A discounted public transport ticket, a successor to the widely popular 9 euro ticket offered this summer, will take €3 billion next year.

The ministry said the breakdown did not yet include the financial effects of postponing a CO2 price increase, an agreed electricity price cap or the dampening of rising network charges which would amount to over €10 billion. — Reuters