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Germany’s EUR 200 bn energy aid package criticised by Poland, Brussels: report

07.10.2022 15:00
Germany’s new energy aid package to families and businesses has come under fire in some parts of Europe, with the Polish prime minister warning the plan might "destroy" the bloc’s single market. 
German Chancellor Olaf Scholz arrives at an informal European Union summit in Prague, the Czech Republic, on Friday, October 7, 2022.
German Chancellor Olaf Scholz arrives at an informal European Union summit in Prague, the Czech Republic, on Friday, October 7, 2022.PAP/EPA/Filip Singer

The controversy came as EU leaders gathered in Prague, the Czech Republic, for an informal summit to discuss ways to counter the energy crisis fueled by Russia’s invasion of Ukraine, Polish website biznesalert.pl reported on Friday.  

Poland’s Mateusz Morawiecki told reporters ahead of the Prague meeting: “During the last financial crisis and the COVID-19-related crisis, Germany liked to lecture others that you must not use domestic financial mechanisms because it would drive [public] deficit and debt.”

He added: “The Italians and the French weren’t allowed to do it, and neither were the Poles, but they [the Germans] are,” as cited by bizneslert.pl.

The Polish prime minister warned that the German aid package was something that might "destroy" the single market.

"I am convinced the vast majority of the EU countries share my views," Morawiecki told the media, as reported by euronews.com.

German aid plan

Berlin’s extensive new package to protect their citizens and companies from soaring electricity and gas bills is worth EUR 200 billion, biznesalert.pl reported.   

The German aid plan has also raised concerns in Brussels, according to the Polish website. 

In a recent article for the Irish Times newspaper, the European Commissioner in charge of the Economy, Paolo Gentiloni, and the European Commissioner in charge of the Internal Market, Thierry Breton, wrote: “How can EU countries that do not have the same fiscal space also support businesses and households?”

The two senior European Commission officials warned: “It is more important than ever that we avoid fragmenting the internal market, setting up a race for subsidies and calling into question the principles of solidarity and unity that underpin our European project.”

Gentiloni and Breton said: “Only a common and united European response can preserve our industry and protect our citizens.”

The European Commission is yet to assess whether Germany’s energy support package is compatible with EU rules about state aid, biznesalert.pl reported.

Brussels proposes price cap on gas

Meanwhile, Germany is opposing an EU-wide price cap on gas, putting Berlin at loggerheads with 15 member countries, including Poland, France, Italy and Spain, according to the Polish website.

On Wednesday, European Commission President Ursula von der Leyen proposed two caps on gas prices to contain skyrocketing electricity bills, among other measures.

The first cap would apply to daily market transactions at the Dutch Title Transfer Facility (TTF), Europe's leading trading hub, in an effort to tame speculation.

Meanwhile, the second cap would target the price of gas that is used only for the production of electricity, as reported by euronews.com.

Von der Leyen also proposed new investment in diversification, energy transition and energy efficiency, bizneslert.pl reported.

Prague summit

At Friday’s summit in Prague, EU leaders were expected to seek new bloc-wide measures to tackle the energy crisis fueled by Russia’s state gas company Gazprom, biznesalert.pl said.

EU leaders were due to “discuss how to guarantee security of supply and affordable energy for households and businesses, particularly for the coming winter,” officials in Brussels told reporters.

Gazprom’s actions are seen as an attempt to derail Europe’s support for Ukraine amid the Russian invasion, biznesalert.pl reported. 

Friday is day 226 of the Russian invasion of Ukraine.


Source: biznesalert.pl, consilium.europa.eu, euronews.com, irishtimes.com