Germany could subsidise electricity prices despite EU state aid rules, the Green Party, a junior partner in Chancellor Olaf Scholz’s coalition government insisted, pointing to efforts by France and Spain to extend their own subsidies.
German Economy Minister Robert Habeck (Greens) has repeatedly pushed for electricity subsidies for energy-intensive industries to ensure German businesses remain competitive despite higher prices after the country turned away from Russian gas.
“There are states within the European Union that work organically with this tool, such as Spain and France,” Omid Nouripour, one of the Greens’ two leaders, told reporters on Thursday in Nuremberg.
He added that Germany could work out a scheme in compliance with EU subsidy rules.
As for France and Spain, the former has capped energy price increases for small and medium-sized enterprises (SMEs) at 15% from 2023, while the other has paid subsidies to gas-intensive manufacturers to offset higher prices.
However, the Commission has only granted interim permission for those subsidies under its Temporary Crisis and Transition Framework, which until the end of this year, allows EU states to support companies suffering from the fallout of Russia’s invasion.
Support could be extended further, especially as Nouripour expects at least France to lobby the Commission for permission to extend the subsidies soon, which could open the door for Germany to introduce its own scheme.
This will be no easy task, however, as the Greens face opposition from their coalition partners, the liberal FDP party, and Scholz’s social democratic SPD faction.
The topic has, however, gained momentum, as SPD lawmakers have recently drafted a proposal for their own subsidy scheme, which comes close to Habeck’s proposal. However, the cabinet failed to make progress on the matter at their two-day retreat this week.
Habeck told reporters afterwards that he was in “permanent” contact with the European Commission on the legality of such a scheme under EU rules but added that “there is nothing more to say about this, at least not today.”
On Thursday, Nouripour and Ricarda Lang, the Greens’ other leader, refused to rule out a compromise proposal by Finance Minister and FDP leader Christian Lindner, who had suggested lowering taxes on electricity more broadly to the minimum allowed by EU rules.
This is also the preferred option by the German industry association BDI, which said it wants to avoid the impression of the industry being supported at the expense of citizens or other companies.
“I’m positive that we will find a solution,” Nouripour said, though he added that the Green proposal was preferable.
(Nick Alipour | Euractiv.de)
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