Germany fights back against EU over €200bn cap branded ‘cannibalism’

Olaf Scholz says Germany 'will manage better this winter'

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Germany’s Olaf Scholz and ministers have defended their €200billion energy scheme after EU members shared their outrage. The Chancellor announced a gas price relief scheme in September, where Berlin will set a limit for gas prices and pay the difference between that cap and what gas importers pay on the world market.

However, EU countries and officials from bloc have lashed out at the scheme, accusing Germany of undermining their fellow members.

Italy’s acting Prime Minister Mario Draghi said “we cannot divide ourselves according to the space in our national budgets”, and his successor Giorgia Meloni said Berlin’s move “undermines the reasons for the union”.

Slovakia’s energy minister accused Germany of “destroying our common market” and Hungary’s leader Viktor Orbán called it “cannibalism”.

Paolo Gentiloni, EU Commissioner for Economic Affairs, also said that European solutions are needed instead of “Germany First” actions.

On Wednesday, Spanish Prime Minister Pedro Sánchez warned Mr Scholz the €200billion scheme must not lead to disturbances and unfair competition in the EU’s single market.

At the closing press conference of Spanish-German government consultations in northern Spain however, Mr Scholz again backed his measures.

He said: “If I saw it correctly, [the German support measures] are in line with what others have been doing.

“There is no one, almost no one, who doesn’t do this. Every program is different. 

“Maybe it’s also important to see that what we’ve presented here is a program for the years 2022, 2023 and 2024, and if you put it in that way, it fits quite neatly into the whole set of all the decisions that have been made elsewhere in Europe as well.”

After the bloc’s outrage over the policy, Robert Habeck, Germany’s Vice Chancellor and Federal Minister for Economic Affairs and Climate Action, has accused gas supplier states of “inflated” prices with which they profited from the consequences of the Ukraine war.

In an interview with German outlet noz.de, he said: “Some countries, even friendly ones, sometimes achieve astronomical prices.

“Of course, this brings problems that we have to talk about.” 

Mr Habeck added he was counting on “the EU Commission also talking about this with the friendly states”, and in particular singled out the US.

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Mr Habeck continued: “The USA turned to us when oil prices shot up, and as a result national oil reserves were also tapped in Europe. 

“I think such solidarity would also be good for curbing gas prices.”

The Vice Chancellor then turned to Brussels, and said the EU “should bundle its market power and orchestrate a smart and synchronised purchasing behaviour of the EU states so that individual EU countries do not outbid each other and drive up world market prices”.

He then noted that European market power was “enormous”, before saying it just had to be used.

Mr Scholz has previously hit back against concerns from EU officials, including European Commission President Ursula von der Leyen.

The Chancellor singled out Thierry Breton, the European Commissioner for the internal market from France, after he and European Commissioner for the economy Paolo Gentiloni said they would review Germany’s plan.

Speaking on Tuesday, Mr Scholz said: “Commissioner Breton certainly looks around him, where he comes from, and therefore knows that the measures we are taking are not unique, but are also taken elsewhere and are justified.”

It comes after the EU agreeing on a price cap on Russian oil sales on Tuesday, according to European diplomats.

Additional reporting by Monika Pallenberg

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