Germany to quickly extend industry energy price relief to smaller companies

Energy-intensive small and medium-sized enterprises (SMEs) in Germany will receive government support to cushion the impact of high gas and electricity costs on the companies as soon as possible, economy minister Robert Habeck said. “We must now muster all the financial strength necessary to secure the good substance of our economy and jobs in this country and lead them into the future,” Habeck told a meeting of SME associations. The government’s existing support programme for industry, which 2,500 companies have already registered with, will now be opened up to smaller companies. Additionally, the criteria for application will be softened. “Cushioning the high energy price increases is now imperative, especially for SMEs,” Habeck said. The new programme is not only open to manufacturing companies, but also firms in small trade and services. 

Companies most affected by high energy costs will receive the highest subsidies, the ministry confirmed, possibly even retroactively from September. But it also stressed the programme cannot compensate for every cost increase. “Moreover, a subsidy must fit with the goal of saving gas, especially this winter, and preventing a gas shortage that would hit the economy even harder,” it said. On top of the programme, the government is also considering an extension of industry support for all sectors. “For companies that have been hit particularly hard by the consequences of the Russian war of aggression and are not sufficiently secured by the current aid programmes, work is to be done on rescue solutions,” the ministry said.

Across Europe, 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 firms’ investment plans and curtail production, leading to fears of severe damage to the  economy.