Before the government’s announced decisions on a new relief package, the Confederation of German Trade Unions (DGB) specified its proposal for an energy price cap. In view of the rising gas and electricity prices, politicians must quickly get the energy price cap on the way, according to a new DGB concept that is available to the German Press Agency. Without sufficient relief measures, the DGB sees social cohesion, economic development and solidarity with Ukraine at risk.
The state should give every household a price guarantee for a basic requirement for electricity or gas. The market price should apply to everything above that.
In a model calculation of the DGB concept, a family of three would pay 990 euros for a basic gas requirement of 11,000 kWh. According to the concept, the total costs for the energy price cap amount to a maximum of 11 billion euros at the current price level and 22.65 billion euros at a gas price level of 20 cents/kWh.
DGB calls for short-term measures
Even if it is implemented promptly, such a price cap cannot be expected to be introduced before the end of this year. “Until the implementation of an energy price cap, short-term relief measures (…) should be implemented in order to adequately cushion the existing price shocks,” said the trade union federation.
DGB boss Yasmin Fahimi told the German Press Agency: “The federal government’s previous relief measures are far from sufficient.” The basic need for electricity and gas must remain affordable for everyone. “On the other hand, if you live big, you should pay for it.”
Fahimi specifically suggested that there should be an energy price flat rate of 500 euros before a price cap. Fahimi demanded that pensioners, trainees, students and benefit recipients would also have to be taken into account if such a flat rate were to be reissued.
Money should come from funds
Fahimi put the savings for a 3-person household through a price cap at around 1,200 euros per year. “The price is formed on the market above the basic requirement,” she explained. “This is an effective incentive for households with higher consumption to save energy.”
Fahimi suggested the federal government’s climate and transformation fund for financing. “This could compensate for the difference in costs between the capped price and the market price for a transitional period.”
According to the proposal, should the market price move below the capped price again, the price cap would continue to apply as the lower limit. “This means there is still an incentive to save energy, while at the same time income is generated to replenish the climate and transformation fund,” explained Fahimi.
