German economy minister: energy situation ‘extremely tense’

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BERLIN, Sept 30 (Reuters) – Germany is in an “extremely tense situation” with regards to energy supply, Economy Minister Robert Habeck said on Friday, a day after the government set out a “defensive shield” to protect Germans from the impact of soaring energy prices.

“We are still in this emergency. If we don’t save, if households don’t reduce consumption, we still risk not having enough gas in the winter,” he told Deutschlandfunk radio.

Despite the government’s 200 billion euro ($196.4 billion) “defensive shield”, Habeck added: “We are not going to subsidise the price of gas down to what it was in 2021, not for a very long time.”

German Chancellor Olaf Scholz set out a 200 billion euro ($194 billion) “defensive shield”, including a gas price brake and a cut in sales tax for the fuel, to protect companies and households from the impact of soaring energy prices.

Europe’s biggest economy is trying to cope with surging gas and electricity costs caused largely by a collapse in Russian gas supplies to Europe, which Moscow has blamed on Western sanctions following its invasion of Ukraine in February.

“Prices have to come down, so the government will do everything it can. To this end, we are setting up a large defensive shield,” said Scholz.

Under the plans, to run until spring 2024, the government will introduce an emergency price brake on gas, the details of which will be announced next month. It is scrapping a planned gas levy meant to help firms struggling with high spot market prices.

($1 = 1.0184 euros)

PHOTO: German Minister for Economic Affairs and Climate Protection Robert Habeck attends a press conference on energy supply in Berlin, Germany. EPA-EFE/FILIP SINGER

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