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Germany: Unions are asking for more relief from the government

The public debate, or what many say is the “fiasco” with the new natural gas fee and the confusion it causes as to which energy companies are the real beneficiaries of the state aid that will result from it, continues in Germany.

Already the Minister of Economy and Energy Robert Hambeck has announced the review of the legal criteria for his award, with the chancellor agreeing. At the same time, however, the pressure on the coalition government of Social Democrats-Greens-Liberals to take additional relief measures due to high inflation and soaring energy costs is increasing.

Joint letter to Hambek for further support

This weekend it is the turn of the Association of Housing Associations together with Consumer Protection Associations as well as the Association of Municipal Organizations of Public Benefit, which in their letter to Robert Hambeck make another resounding call for new relief measures mainly in the form of energy and housing allowances . The aim, they say, is to ensure smooth “economic and social relations” in winter.

They consider the reduction of the VAT on natural gas a “correct step”, however they consider the measure insufficient. According to the n-tv network, they are proposing as a short-term measure a reduction in utility costs this year – which in Germany are usually high – as well as a graded social energy allowance for low-income households.

Another measure included in their proposals is the support of businesses with the aim of ensuring their liquidity and avoiding payment defaults.

A ceiling on energy prices?

Through the German news agency dpa, Gerg Hoffmann, head of the powerful German trade union IG Metall, calls for the establishment of a ceiling on the prices of natural gas and electricity.

He even believes that the German government should consider, as part of a third relief package, the idea of ​​additional one-off energy subsidies for pensioners, students and the unemployed. “Without affordable energy prices, social cohesion may break down,” says Jörg Hoffmann.

The fact is, however, that the German government is speeding up the “closing” of the third relief package with a view not only to low but also to middle incomes. In mid-September, a new round of consultations between the German government and unions is imminent.

Forecasts of bankruptcies, “red loans” and recession

At the same time, the forecasts of prominent German economists for the course of the German economy continue to be ominous. “If natural gas flows are reduced, inflation may rise to double digits and economic output will likely decline by 3-4%. In such a case, Germany could expect a real recession in 2023,” says the head of the Leibniz Economic Institute, Christoph Schmidt. For the moment, however, the German institute predicts growth for Germany of the order of 2.7%.

Finally, the danger of a wave of bankruptcies and German “red loans”, as many consumers will not be able to meet their current financial obligations, sound financial experts in the financial newspaper Handelsblatt. As Peter Kenning, chairman of the Council for Consumer Affairs at the German Ministry of Consumer Protection, indicates, “the risk of insolvency is particularly high for low-income households that heat with natural gas.”

img: DW

Source: News Beast

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