States urge German government to launch gas price brake fast

The German states are calling for greater financial support by the federal government in the energy crisis, urging a quick introduction of a national gas price brake to help struggling companies and households. Bavaria’s state premier, Markus Söder, said the planned gas price brake should come still in October. “If help comes too late, many businesses will no longer be able to survive and citizens end up in a financial emergency,” the conservative CSU politician told newspaper Süddeutsche Zeitung. “The gas price brake has to take effect fast, comprehensively and unbureaucratically,” he said. The states would need more financial support from the federal budget to finance measures like cheaper public transport and support of critical infrastructure like hospitals, the Bavarian state premier added. The mayor of city-state Bremen, Social Democrat (SPD) Andreas Bovenschulte, said the gas price brake would offer a “solid foundation” for getting through the crisis but will cost the federal government many billions to implement. A draft agreement between the federal government and the states on energy crisis relief seen by Süddeutsche Zeitung still kept sticking points on funding open and contained remarks that the states could only provide financial assistance in the crisis if there was “a significant reduction of the financial burden of states and municipalities by the federal government”.
Finance minister Christian Lindner, meanwhile, said a quick decision regarding the price brake is unlikely, as “lawmaking takes time”. However, the minister from the Free Democrats (FDP) told public broadcaster ZDF in an interview that the state’s rising tax income due to the rising prices would provide some leeway for financial support, adding that the state had an interest “at all levels” in assisting struggling energy consumers.

The government and the states were due to meet on Tuesday, 4 October, to debate further response measures in the energy crisis. The meeting comes days after Chancellor Olaf Scholz (SPD) announced a “defence shield” worth 200 billion euros to protect citizens and companies from skyrocketing energy costs, of which a brake on the prices for gas and electricity is supposed to be a key element. The defence shield comes on top of a slew of other measures with a combined value of some 100 billion euros decided since Russia launched its invasion of Ukraine in February this year. An expert commission tasked with finding a workable solution for introducing the tax will table its recommendations in October.