Chancellor Olaf Scholz met with massive criticism at the EU summit in Prague with his “double boom” to cushion the high energy prices. Poland’s Prime Minister Mateusz Morawiecki spoke on Friday of “German egoism” and appealed to Germany’s solidarity with the other EU countries.
Other heads of government and EU Commission President Ursula von der Leyen warned that the German 200 billion package would distort the common market. Scholz has so far been unaffected by all of this: Other countries have not done it any differently, he says.
The summit in the Czech capital was primarily intended to show ways out of the energy crisis caused by Russia. The exploding energy costs are causing problems for consumers and the economy alike – and winter is yet to come. However, a European solution, especially in the fight against high gas prices, is still a long time coming. Also because Germany is reluctant to an EU-wide gas price cap demanded by many countries.
Instead, the federal government wants to set up a national program and make up to 200 billion euros available for it by 2024 – a sum that other, less economically strong countries can swindle. This is intended to cushion the high electricity and gas prices.
Poland warns of “Germany’s dictates”
What Scholz calls “double boom” is a cause for concern for countries like Poland, Luxembourg and Latvia. Morawiecki expressed himself most clearly: “German egoism” must finally be put in the drawer, he said. One is decided against the destruction of the European single market. “This destruction will take place when the German government itself can only subsidize its own companies.” Polish, French, Dutch or Spanish companies would then be in a much more difficult position. The day before, Morawiecki had warned against a “dictation by Germany” in European energy policy.
The key word in Brussels jargon is “level playing field” – competitive equality. Commission President von der Leyen pointed this out in Prague and warned that the common market could suffer from national unilateralism. It is important that all companies have the same opportunities to participate in the internal market. There shouldn’t be any competition through subsidies, only through quality. Latvia’s Krisjanis Karins said a country’s government “can’t be allowed to borrow more and push prices down or give bigger subsidies, making companies more competitive”.
Memories of other crises are awakened
Above all, the accusation of going it alone nationally should hurt Scholz. For months he has repeatedly emphasized that there should be no going it alone in the Ukraine crisis – when it comes to arms deliveries. Now EU partners are complaining about Germany going it alone in combating the energy shortage.
Memories of other crises are awakened in which Germany was accused of selfishness and recklessness, such as the euro crisis or the initial phase of the corona pandemic. Morawiecki addressed Germany with a message: “Be united, in solidarity with everyone else.” In difficult times, everyone must agree on a common denominator and not on the denominator that is only suitable for one country.
Scholz lets the allegations bounce off. “Many others are doing something similar now and in the next few years,” he said upon his arrival in Prague. He means countries like France, the Netherlands or Spain.
Brussels think tank sees “a completely different order of magnitude”
Calculations by the Brussels think tank Bruegel show, however, that these countries do not come close to the dimensions of the German efforts. The Netherlands, for example, announced relief worth around 50 billion euros – including all projects since September last year. According to Bruegel, that is about 5 percent of the Dutch gross domestic product. The 200 billion of the “double boom” would also correspond to about 5 percent of German GDP.
However, if you include the relief planned since September 2021, you get a total of around 300 billion euros – around 8 percent of German GDP. Another example: Spain has spent around 35 billion euros on relief programs since September last year, which is 2.9 percent of economic output. “With the German package, we are really entering a completely different dimension,” said Bruegel economist Simone Tagliapietra of the German Press Agency.
