The federal government’s billion-dollar “double boom” for the German economy has sparked international criticism. The EU wants a common approach.
Federal Finance Minister Christian Lindner defended an energy aid package of up to 200 billion for citizens and companies in the face of international criticism. On the sidelines of the meeting of euro finance ministers in Luxembourg, the FDP politician said:
They correspond to what other countries in Europe offer and are therefore “definitely not great”.
EU countries: No equal opportunity in the domestic market
Countries such as Italy, Spain and Luxembourg have criticized the fact that not all countries have the financial resources to finance such measures and therefore the internal market may deteriorate. EU Industry Commissioner Thierry Breton also wrote: “We urgently need to consider how we can offer member states that do not have this financial space the opportunity to support their industries and companies.”
Lindner once again emphasized that Germany will comply with the debt brake next year. This allows the federal government to take on only a limited amount of new debt. The defense shield will be financed by a special fund this year and then gradually paid off. The FDP politician said the money was “separated very strongly to prevent economic damage, especially in the vulnerable German economy”.
EU Commissioner seeks joint action
However, Valdis Dombrovskis, the EU Economic Commissioner and Vice-President, warned Germany indirectly:
Commissioner Paolo Gentiloni, who is also responsible for the economy, and his colleague Breton defended European solutions in a guest article in the “Frankfurter Allgemeine Zeitung”.
The German package raises questions, they wrote. “We must consider common European tools to prevent the different leeway that states have in their national budgets from causing internal distortions.” You have to set up joint support mechanisms, as in the corona pandemic – for example, they called the Sure program, which enables short-term work programs with cheap EU loans during the pandemic.
With its defense shield, the federal government wants to protect consumers and companies from high energy prices due to the Ukraine war. Among other things, gas and electricity will be provided cheaper. There should be liquidity and equity support for companies. Details are still open.
I’m Harold O’Connor and I work as an author and editor for News Unrolled, a news website dedicated to delivering the latest world events. With my in-depth research skills, passion for news writing, and keen eye for detail, I strive to provide readers with accurate information on current affairs from around the globe.