Germany to terminate energy price brakes – finance minister – Analysis

Berlin has halted major spending commitments following a ruling that declared a national off-budget fund unconstitutional, according to Finance Minister Christian Lindner. The limits on electricity and gas prices, previously planned to be extended until March 2024, will now expire at the end of this year. Lindner stated that the Economic and Stabilization Fund will be closed as of December 31, and there will be no more payouts from it.

However, it remains unclear whether energy support will be provided through the regular budget in 2024. The financial support scheme was implemented to protect households and businesses from high gas and electricity prices resulting from reduced energy imports from Russia after the conflict in Ukraine.

The European Commission recently called on Berlin to phase out its price caps as soon as possible. This decision comes after the German Constitutional Court blocked the federal government’s attempt to transfer €60 billion from funds allocated for pandemic relief to other initiatives.

The WSF, a non-budget institution worth about €870 billion, is one of Germany’s 29 similar funds. The court’s ruling has put funding for efforts to modernize the German economy and combat climate change at risk. Additionally, it could set a precedent for fiscal responses to future crises.

Source: RT news: Germany to terminate energy price brakes – finance minister