Germany prepares “wide” rescue programme for SMEs struggling with rising energy prices

The German government will expand state support for businesses faced with rising energy prices ahead of the coming winter, economy and climate minister Robert Habeck said in a speech in parliament (Bundestag). Germany would make support that so far is largely restricted to big and energy-intensive sectors also available to small- and medium-sized businesses (SMEs). “We will open a wide rescue umbrella. We will design it so that SMEs are covered,” said Habeck. The government had introduced a 5-billion euro scheme supporting energy intensive industries earlier this year. This programme would be expanded. For a certain period, businesses for example will,  not have to prove they are in international competition to receive support, and the programme will be open to all sectors. “We will protect German companies and the German ‘Mittelstand’,” Habeck said, referring to the country’s vast and important group of small and medium-sized companies.

Across Europe, the rising energy prices – which have also become a key driver of inflation – are putting pressure on companies in all sectors. They are beginning to bite into companies’ investment plans and curtail production, leading to fears of severe damage to the country’s economy. While the government has emphasised it cannot make up for all the additional burdens, it has introduced support schemes for businesses affected by the crisis – above all for the energy intensive industry. Some of the government's support and relief measures, such as postponing the next rise in the carbon price or the relief on petrol cost, have drawn criticism from energy and climate experts who fear that an overall delay in climate action will take Germany further off meeting its climate commitments.