German energy policy, which has become European under pressure from Berlin in recent years and culminated in the dream of a decarbonized economy under the Green New Deal brand, is entering a remarkable stage. The Germans are beginning to protect themselves against what they themselves have started and spread throughout Europe. Against the consequences of the Green Deal invented and enforced by them. Against its very essence, which should have been to raise the price of electricity in order to consume as little as possible.
So far, the dream of a carbon-free economy in Germany ends with anxiety about the liquidation of its own industry, which the cabinet is averting with a new massive wave of aid to companies. It will compensate them for expensive electricity. That is, what the German founding fathers of the Green Deal invented and wanted. Asked about the consequences. Germans go to protect themselves from the consequences of their own dreams and actions
The coalition cabinet of social democrat Olaf Scholz approved a massive subsidy program for German business on Thursday afternoon. The government will contribute 12 billion euros (300 billion crowns) to him for expensive energy in the next two years alone. By 2028, subsidies should reach a total of 28 billion euros (700 billion crowns). “We are radically reducing electricity taxes, stabilizing transmission and distribution fees and will continue with government compensation so that companies are better able to cope with current electricity prices,” Scholz said after the cabinet meeting.
In addition to the minimization of energy taxes and exemption from all subsidies for renewable sources, direct state subsidies for the 350 most energy-exposed German companies will be extended for the next five years. Ninety of the most energy-intensive German companies will receive even more state subsidies.
Berlin has not yet approved the massive subsidy program in Brussels. Public support to companies is prohibited in the European Union and all exceptions must be approved by the European Commission. Brussels is still furious. But he never went against the Germans and he won’t go now.
But everyone can see that the Germans have just started a massive subsidy infection that will spread throughout Europe. Businesses in all other countries will come to their governments and say: This is an unfair environment. We cannot compete not only with the Americans, who have tens of percent cheaper energy, but also with the Germans, because they have massively subsidized them. Also subsidize them for us.
We are entering a never-ending spiral of subsidies, artificial price increases and regulations. In the beginning, emission allowances were introduced to make electricity from “dirty sources” more expensive. Coal and gas. In addition, mandatory contributions of all people and companies to subsidies to operators of renewable resources were introduced. The Germans exempted part of them from companies and, on the contrary, imposed more of them on households.
Then they shut down their core. The gas bet became complicated after being cut off from Russia. So they had to start burning coal again when there was no wind or light. In their own eyes, the dirtiest source. So today they have one of the dirtiest energy companies in Europe. And expensive electricity at that. Among other things, because the allowances that the coal business has to buy are record expensive.
German companies start screaming that it is ruining them. And the German government will give them massive subsidies. In the end, the German people will pay for it all through taxes. He will have expensive electricity, and because of its artificial increase in price, he will subsidize the business. It will pay twice.
Czech companies follow developments in Germany very carefully. And they are already pushing Prime Minister Petr Fiala’s government for similar subsidies. No wonder.