Rich countries can afford to mobilize wealth for the rescue

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Germany will spend at least 65 billion euros ($64.7 billion) to protect customers and businesses from rising inflation, Chancellor Olaf Scholz said on Sunday, two days after Russia said it was suspending some gas supplies. for an unlimited period, reports news.ro, citing Reuters.

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

Russia’s invasion of Ukraine in February fueled global inflation and prompted warnings of social and economic unrest as the world moves away from cheap energy and flexible global supply chains.

In Germany, where annual inflation was 7.9% in August, the effect was exacerbated by Russia’s reduction in gas volumes pumped into the country, which caused a rise in the price of energy that powers Europe’s largest economy.

“Russia is no longer a reliable energy partner”,

Scholz told a news conference, adding that Germany’s previous preparations meant it would skip the winter heating season.

Gas reserves reached 85% of capacity on Saturday, almost a month ahead of schedule, partly due to reduced consumption by corporate consumers.

But while reserves are sufficient, the government should protect consumers and businesses from higher costs, he said.

“You will never walk alone”,

he added, switching to English to recite a famous song adopted by fans of the English football club Liverpool.

The energy crisis became more pronounced when the Russian giant Gazprom said on Friday that it is keeping the main Nord Stream 1 pipeline, the largest single pipeline that carries Russian gas to Germany, closed.

Scholz rejected suggestions that the loss of the steady flow of cheap Russian gas that Germany has thrived on for decades could herald a darker new era for his country.

“Germany will go through this period as a democracy, because we are very strong economically and we are a welfare state: the two together are important. With each new wind farm, we will become more independent”,

he told ZDF television.

The latest support package brings to 95 billion euros the amount allocated to combat inflation since the start of the war in Ukraine in February.

Instead, the government spent 300 billion euros to support the economy during the two years of the pandemic.

Finance Minister Christian Lindner said that the 65 billion announced on Sunday could be increased if electricity prices continue to rise.

The exceptional tax, called a “coincidence tax” to mitigate his party’s objections to the initial term, would bring in revenues of the order of “double-digit billions”, he said.

Part of the proceeds would be used to provide 1.7 billion euros in tax breaks to 9,000 energy-consuming companies, a government document shows.