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30 September 2022 | Other

Germany plans to borrow €200 billion to cope with gas price spike

DAX

Germany introduced plans to take on another €200 billion ($195 billion) in debt to finance a program aimed at limiting the influence of rising energy prices on the economy. 

Chancellor Olaf Scholz’s administration will repurpose the recovery fund that was established to help recover from the effects of the coronavirus pandemic. Germany will commit borrowing to the fund and use it to cap gas prices. The government is also developing a program aimed at reducing electricity costs and is considering using income from windfall taxes imposed on electricity producers that do not use gas in manufacturing. 

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