German Economy Minister Calls for Help for Companies Facing Energy Pain – BNN Bloomberg RS News

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(Bloomberg) — German Economy Minister Robert Habeck urged lawmakers Thursday to fund a major rescue package for companies struggling with rising electricity costs, a call that could add to the rift in the three-party government over how to shore up the energy sector.

A member of the Greens party said Europe’s biggest economy should be able to increase aid for businesses in the same way it came up with a special 100 billion euro ($98 billion) environmental protection fund earlier this year.

“We are in a situation where companies need our support, to protect the German economy, or rather protect it,” Habeck told parliament on Thursday.

Habeck’s demand comes a day after the government unveiled the privatization of Uniper SE, amid growing divisions within Chancellor Olaf Scholz’s coalition over how to fund rescue packages for Germany’s biggest gas supplier and other utilities struggling with rising prices. The Greens favor new debt or higher taxes, while Finance Minister Christian Lindner, who leads the pro-business Free Democrats, has dismissed these options.

Read more: Germany Announces National Gas Authority in Move to Avoid Energy Crisis

A compromise could be a special fund similar to the defense package, created in the spring in response to Russia’s invasion of Ukraine and not part of the regular budget. It will see state-owned bank KfW offer government-backed loans to energy companies.

The government can get money from the existing economic stimulus fund (WSF), which was first created in the 2008 financial crisis and later used in the Covid pandemic. One third has already been spent but 67 billion euros remain. The budget committee is expected to pass a rule change later on Thursday to reactivate the fund to ensure Germany’s power companies can pay their debts.

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