Germany pledges to help small businesses with high energy costs

Businesses in Germany, such as bakers and restaurants, are being hit hard by spiralling energy costs. Germany's Economy and Climate Minister Robert Habeck has pledged to help them out with financial support.

Bakery saleswoman Stefanie Buske stands in the early morning in the Fahrenhorst bakery, which is deliberately lit sparingly to save costs.
Bakery saleswoman Stefanie Buske stands in the early morning in the Fahrenhorst bakery, which is deliberately lit sparingly to save costs. Photo: picture alliance/dpa | Julian Stratenschulte

The Green Minister wants to adapt the existing Energiekostendämpfungsprogramm (energy cost containment programme), which has so far been geared towards larger firms – such as those that own factories –  so that it also supports smaller and medium-sized businesses in the trade and service sector. 

Under the programme, the more a company is affected by high energy costs, the higher the subsidies they receive. 

On Tuesday, Habeck will meet with around 40 associations of small and medium-sized businesses in a digital summit, where the main topic will be an expansion of the current rescue package. If the energy cost containment programme is extended to smaller businesses, it could also be possible that the subsidies could be granted retroactively from September.

READ ALSO: What’s in Germany’s support package for rising energy bills?

“However, it now crucially depends on how quickly we can reach agreement in the federal government and quickly get implementation underway,” said the Economics Minister.

The exploding energy costs pose an existential threat to many businesses which, having made it through the Covid pandemic, now face a new crisis of survival.

A recent survey of around 500 hotel and restaurant operators showed that half of all hotel and restaurant businesses in the state of Hesse alone said that they felt their existence was threatened because gas prices had risen so sharply, while one in three said they would have to pay at least 50 percent more to their gas supplier from October.

Many bakeries – particularly those that heat their ovens with gas – are also facing an existential crisis. In one case recently reported in the Südwestrundfunk, the energy costs of a bakery in Rhineland-Palatinate rose from €560 per month to almost €4,000.

The Economics Minister also wants to cushion energy costs for small and medium-sized enterprises with an energy price brake and a reduction in energy taxes to the minimum tax rates permitted under European law.

Habeck wants to extend the existing subsidies until at least April 2024 and is currently holding talks with the EU Commission.

“I mean, we must now muster all the financial strength needed to secure the core of our economy and jobs in this country and lead them into the future,” Habeck said. 

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Germany says must brace for ‘unimaginable’ after gas leaks

Germany's interior minister said Wednesday the country must prepare for previously "unimaginable" threats to its energy security after dramatic pipeline leaks the EU blamed on sabotage.

Germany says must brace for 'unimaginable' after gas leaks

Nancy Faeser said Europe’s top economy would need to enhance its vigilance to address such risks in the wake of the damage to the Nord Stream 1 and 2 energy links between Germany and Russia.

“We have to adapt to scenarios that were previously unimaginable,” she said. “That requires strong security authorities with the necessary resources and powers.”

Faeser called for a rapid probe of the “probable act of sabotage” on the pipelines beneath the Baltic Sea close to Denmark and Sweden so that “those responsible” can be identified.

“Protecting critical infrastructure has top priority,” she said, adding that Berlin had presumed “for months” that there was an “abstract threat to energy infrastructure” given its high profile in the wake of Russia’s war on Ukraine.

READ ALSO: WATCH: Baltic Sea foams as gas leaks from damaged Nord Stream pipeline

Defence Minister Christine Lambrecht said the “troubling incident” underlined the importance of an ongoing “modernisation” of the German navy’s fleet for surveillance in cooperation with partner states on the Baltic.

Methane gas from the leaks are bubbling to the surface of the Baltic Sea in discharges expected to last for a week, until depletion of the gas in the pipelines.

The three outflows from the Nord Stream 1 and 2 pipelines, whose cause remain a mystery, have sent natural gas prices soaring, exacerbating an energy crunch in Europe as it stands on the threshold to winter.

EU foreign policy chief Josep Borrell said that “all available information” indicates the leaks “are the result of a deliberate act”.

Suspicion has focused on Russia, which has cut gas supplies to Europe in retaliation for severe Western sanctions over the war in Ukraine.

Germany, which until recently was highly dependent on Russia energy, will wait for a full investigation of the incident before drawing conclusions, a government spokesman said on Wednesday.

READ ALSO: Who is behind the Nord Stream Baltic pipeline attack?