Merkel’s Power Price Talks With German State Leaders Break Down

Talks between Chancellor Angela Merkel’s government and state leaders on proposals to stop power prices from rising in Germany failed, delaying concrete steps from being taken until after elections in September.

After Merkel’s meeting with state leaders failed to produce an agreement on the so-called power-price break proposed by two of her cabinet ministers last month, she had ordered her chief of staff to continue negotiating with the states to find a solution before the summer recess.

Those meetings have shown that “a consensus over measures that can be quickly implemented ahead of federal elections can’t be reached,” Steffen Seibert, Merkel’s spokesman, said today. Talks on a comprehensive overhaul of the country’s clean-energy subsidy system will continue, Seibert told a news conference in Berlin.

The government has been trying to prevent a voter backlash after costs for Germany’s clean-energy expansion spiraled as the government sought to more than triple the share of renewables in the power mix by 2050 while phasing out nuclear generation. Consumers in Europe’s biggest economy have seen power bills climb after a fee they pay for renewables jumped 47 percent to a record.

“It was foreseeable that the government’s proposal wasn’t capable of winning a majority,” Michael Juerdens, a spokesman for the Social Democratic Party-led state government of Lower Saxony, said today by phone, without elaborating.

Economy Minister Philipp Roesler and Environment Minister Peter Altmaier in February proposed reducing subsidies for both existing and new renewable sites and allowing fewer exceptions for energy-intensive companies. They estimated the measures would save consumers 1.86 billion euros ($2.4 billion) next year.

Without reform, “prices will continue to climb,” said Holger Schlienkamp, a spokesman for the Economy Ministry.

To contact the reporter on this story: Stefan Nicola in Berlin at snicola2@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

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