Knock-on effect of German energy subsidies?
Germany's plan to lower electricity costs for its energy-intensive industries through state subsidies as of January next year has put a cat among Europe's pigeons. Commentators point beyond Germany's borders, where the subsidies present an existential threat to the competitiveness of other European nations with similarly electricity-intensive structures.
A race for survival
The Czech Republic is among the countries unhappy about Germany's state subsidies, Reflex explains:
“No country but Germany can afford such extensive subsidies, as state budgets across almost all of Europe are under severe strain. Nevertheless, all countries will want to respond. ... Otherwise they will no longer be able to offer their products at competitive prices and will very quickly be forced out of the market. The incoming Czech government plans to reduce electricity prices with billions in state subsidies - not only for heavy industry, but also for private households and small businesses. Aid to companies threatened by the subsidy competition will therefore be limited.”
Berlin sidesteps regulations as it pleases
State subsidies threaten to skew competition and are incompatible with the European single market under Article 107 of the European Treaty, Echo24 points out, adding:
“Big countries like the US, or within Europe like Germany, often underestimate the impact of their actions on others. So it is completely possible that the Germans have no idea how shameless their behaviour is. It was precisely their energy transition that dragged the whole of Europe into an ill-considered energy transition. And now they are behaving as if Article 107 ended with the sentence: 'Does not apply if it does not suit Germany.'”