Prime Minister’s Conference: Countries want energy price caps for electricity, gas and heat

Prime Ministers Conference
Countries want energy price caps for electricity, gas and heat

The heads of government of the federal states at the Prime Ministers’ Conference in Berlin. photo

© Bernd von Jutrczenka/dpa

The states struggled for hours to reach a consensus on how they should position themselves vis-à-vis the federal government when it comes to financing the new relief package. Ultimately, an energy price cap is indisputable.

The countries are demanding an energy price cap for electricity, gas and heat in order to limit the explosion in costs for private households and companies. This was announced by North Rhine-Westphalia’s Prime Minister Hendrik Wüst (CDU) after a special conference of the Prime Ministers on the planned relief package III in Berlin.

The federal government must quickly agree on a model, warned the chairman of the Prime Ministers’ Conference (MPK). This is to be discussed in federal-state talks on October 4th. The appointment that was actually planned after the MPK had been postponed by Chancellor Olaf Scholz (SPD) because of the corona infection.

The deputy MPK chairwoman, Berlin’s governing mayor Franziska Giffey (SPD), described the unanimous vote of the federal states for the introduction of an energy price cap as a “groundbreaking decision” and “core result” of the deliberations. This could be “a stop signal” against cost increases in private households, social institutions, companies and industry.

Costs in the hundreds of billions are expected

A sophisticated model does not exist yet, said Giffey. However, costs in the three-digit billion range are to be expected. “In our view, the price we have to pay if we don’t make such an energy price cap is many times higher than making this decision now.” A commission of experts has to determine the exact costs.

The MPK started around four hours late because the countries with CDU and SPD participation had previously struggled to reach a consensus in separate hours-long meetings. Giffey reported that the topic of the debt brake was particularly controversial. “We were not able to finally clarify the question of whether new loans should be taken out to finance relief.”

The SPD-led A-states had made a protocol statement and explicitly advocated such a possibility.

Wüst also wants to talk about tax breaks

Wüst said that tax breaks should also be discussed at the federal-state summit next week. This is a particularly fast-acting lever. “We can’t afford a long back and forth.”

The MPK chairman again called for “a fair distribution of burdens between the federal, state and local authorities”. This affects, among other things, the financing of the planned increased and extended housing benefit, rising hospital costs, regionalization funds for buses and trains and the refugee costs. In addition, a protective shield for the municipal utilities is necessary.

“Precisely relieve – not according to the watering can principle”

“The countries also agree that the relief must be targeted – not according to the watering can principle,” said Wüst. Above all, it is about support for people with small and medium incomes as well as for small and medium-sized companies and commuters.

At the beginning of the month, the federal government presented a third relief package worth 65 billion euros to compensate for rapidly rising prices. However, the financing issues have not yet been clarified between the federal and state governments. The prime ministers are vehemently opposed to excessive cost burdens and criticize the style of the traffic light coalition in terms of the surcharge that has not been agreed with the federal states. Individual countries had already threatened blockades in the Bundesrat.

Wüst, who will hand over the chairmanship of the MPK to Lower Saxony at the end of the month, emphasized: “The hand of the federal states remains stretched out.” The great challenges can only be mastered together.


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