In Germany, 300 euros are given in addition to the pension -

In Germany, 300 euros are given in addition to the pension –

The authorities in Germany recently presented the third package of measures designed to protect households and companies from rising energy prices.

As part of the new package of measures, it includes a financial support of 300 euros for pensioners and 200 euros for students, the extension of a family allowance scheme with a slight increase in the amount offered, the cutting of social insurance contributions for income earners monthly payments of less than 2,000 euros, the increase of allowances for children, the extension of the application of reduced VAT to 7% for restaurants and bars, the expansion of the job saving program and credit facilities for companies.

Also, the executive in Germany promised to apply reforms on the energy market, to tax the profits obtained by companies that take advantage of the crisis and to cap prices.

Even so, ING analysts are of the opinion that the measures are not enough to help the economy avoid recession.

Germany is not giving up on the debt ceiling

In the financial context, German Finance Minister Christian Lindner previously explained that the debt ceiling amendment in Germany will not be affected by the 65 billion euro package of measures designed to help households and companies cope with rising inflation.

In addition, Christian Lindner’s statement came in the context in which a special paragraph was included in the German Constitution in 2009. Under this amendment, known as the debt brake, the Federal Government can incur new debt up to the equivalent of 0.35% of Gross Domestic Product (GDP).

However, German authorities can exceed this threshold if Germany is hit by a natural disaster or in “exceptional emergency situations” that are beyond the state’s control and significantly affect the country’s financial situation.

Thus, the German Minister of Finance explained that the planned support measures are possible within the current budget plans for 2022 and 2023 because tax revenues have increased as a result of inflation.

In the context of the explanation provided by Christian Lindner, currently, in Germany, no additional budget for 2022 will be needed to finance these measures.

So, the measures include: a new, cheaper public transport ticket, a one-off sum of 300 and 200 euros respectively for pensioners and students to pay the energy bill, an increase in allowances for the elderly or those unable to work, and an increase of 18 euros in the allowance for children.