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Germany Set to Borrow €200 Billion to Tackle Gas-Price Surge

  • Government to redeploy and bolster a pandemic-era fund
  • Latest energy intervention follows failed levy on consumers
A partially lit office building in central Berlin.
A partially lit office building in central Berlin.Photographer: Krisztian Bocsi/Bloomberg
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Germany is preparing to borrow an additional €200 billion ($195 billion) to finance a plan to limit the impact of soaring energy costs on Europe’s biggest economy, a move that critics said risks keeping consumption high as shortages loom this winter.

Chancellor Olaf Scholz’s administration will repurpose a fund created to help offset the impact of the coronavirus pandemic and bolster it with additional cash that will be used to put a lid on gas prices. The government is also working on a plan to rein in electricity costs and is considering using a windfall tax on profits at energy companies that don’t use gas to generate power to pay for it.