EU finance ministers plead for unity after Germany's €200 billion gas 'bazooka'

EU finance ministers plead for unity after Germany's €200 billion gas 'bazooka'
German Chancellor Olaf Scholz. Credit: Belga/Nicolas Maeterlinck

EU Finance Ministers are pleading for a unified European approach to the energy crisis after Germany unilaterally announced a €200 billion plan to help its own inhabitants with skyrocketing bills.

While the German Government continues to block a price cap for gas at the European level, despite 15 EU Member States requesting one, it is now introducing such a measure for households and companies in its own country – and borrowing €200 billion to do so.

The sum, announced as a "defence shield" by the German authorities, will be used to limit energy suffering keep and prices affordable. Yet critics have described the measure as a "bazooka", arguing that the decision amounts to double standards. They note that whilst Germany might be able to look out for itself, many EU countries do not have the same financial muscle to fend for themselves.

The European Commission, which has to approve state aid, is thoroughly examining the German plan, saying that "a harmful subsidy race" must be prevented, De Tijd reports. Last week, Italy's outgoing Prime Minister Mario Draghi also stated that EU countries "should not allow themselves to be divided by their budgetary leeway."

'Not an island'

In an opinion piece published in several European newspapers on Monday, EU Commissioner for the Internal Market Thierry Breton and his counterpart for the Economy, Paolo Gentiloni, emphasised that only a solidarity-based EU response protects citizens and makes industry survive.

"It is more important than ever that we avoid fragmenting the internal market, setting up a race for subsidies and calling into question the principles of solidarity and unity that underpin our European project," they said.

As EU finance ministers convened on Monday in Luxembourg, Belgian Finance Minister Vincent Van Peteghem urged the need for harmonised measures across Europe in times of crisis: "Our European system is built on that coordination and solidarity. It is important that we show unity, act as a bloc and create predictability, even in uncertain times."

During the meeting, however, EU finance ministers reportedly harshly criticised their German colleague Christian Lindner, stating that the German Government is pretending to live on an island.

"We will coordinate measures to protect citizens and businesses from the shock of high energy prices," the ministers said in a joint statement. "This is not the time to point fingers at countries but to boost collective solidarity."

On Friday, the 27 EU leaders will gather in Prague for informal consultations on the energy crisis.

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