Germany announces €65 billion package to curb soaring energy costs

Germany will spend at least 65 billion euros ($64.7 billion) on shielding customers and businesses from soaring inflation, Chancellor Olaf Scholz said on Sunday, two days after Russia announced it was suspending some gas deliveries indefinitely.

The measures, agreed after 22 hours of talks between the three coalition parties, included benefit hikes and a public transport subsidy, to be paid for from a tax on electricity companies and by bringing forward Germany’s implementation of the planned 15% global minimum corporate tax.

Russia’s invasion of Ukraine in February has led to inflation worldwide and prompted warnings of social and economic turmoil as the world weans itself off cheap energy and flexible global supply chains.

In Germany, where year-on-year inflation was running at 7.9% in August, the effect has been exacerbated by Russia’s reduction in volumes of gas pumped to the country, which has caused a surge in the price of energy fuelling Europe’s largest economy.

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