Germany will spend about €83.3bn (about $83bn), or about 42% of its announced €200bn plan, to curb gas and electricity prices in 2023 for businesses and households. Such measures were taken by the German authorities in order to mitigate the consequences of the energy crisis, Reuters reports , citing a draft document of the German government.
The stabilization fund of €200 billion was approved by the German government in September. To do this, the authorities had to lift the ceiling on permissible borrowing, which was last done during the covid period. In addition to directly reducing energy and electricity prices, the money will go to support the affected sectors of the economy and ordinary citizens.
However, at the moment the German government is having problems attracting funding for its crisis plan: investors are in no hurry to buy German bonds, expecting higher yields on securities in the future due to the declared tight monetary policy of the European Central Bank. Moreover, analysts expect a hard slowdown in German GDP growth due to high dependence on Russian gas supplies, the reduction of which has hit local companies and producers sharply.
Despite the fears and harsh forecasts of analysts, the German economy is holding up better than expected so far. According to the latest data from Eurostat, in the third quarter of 2022, Germany managed to avoid the predicted recession: GDP showed growth despite negative forecasts. Good performance forced economists to revise their forecasts for German GDP upwards. However, aggregate expectations are still negative – the economy is in for a recession, and GDP will fall by 0.4–0.5 percentage points in the next two quarters.