The gas price brake is still nothing more than a declaration of intent by the traffic light government to calm unsettled citizens and business leaders.

But it is already clear that any form of government-mandated price reduction will entail horrendous costs.

In any case, the parliamentary manager of the SPD parliamentary group, Katja Mast, assumes that the cap on gas prices will cost a “three-digit billion amount” a year.

Corinna Budras

Business correspondent in Berlin.

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Henrik Kafsack

Business correspondent in Brussels.

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Despite the fact that Federal Finance Minister Christian Lindner (FDP) was sticking to the debt brake, Mast expressed confidence in terms of financing.

After recognizing the need for a brake, she was sure "that we will see the necessary financial means".

No concrete decisions

Concrete resolutions were also a long time coming in the cabinet meeting on Wednesday because the federal government is working flat out on an "overall solution", as government spokesman Steffen Hebestreit emphasized.

The aim of this is to protect consumers and companies from high gas prices, to stabilize the gas market and to ensure security of supply in Germany.

Lindner also recently emphasized that not only should prices be limited, but that the range also had to be expanded, for example by restarting more coal-fired power plants and longer running times for the remaining nuclear power plants.

The path now seems clear for the latter: Federal Economics Minister Robert Habeck (Greens) announced on Tuesday evening that two nuclear power plants could remain online until mid-April.

However, this is not enough for the FDP, they wish that the existing nuclear power would be used for a longer period of time.

Commission of experts takes time

However, the decision on a price cap is still a long time coming for other reasons: the federal government convened a commission of experts to look at how gas prices can be capped, which only met for its first meeting last Saturday.

It is expected to develop specific proposals by the end of October.

Different models are under discussion.

A classic cap, such as that imposed by the government in France about a year ago, is rather unlikely.

A graduated tariff with a lower basic price for basic consumption and higher market prices for everything that goes beyond that has better chances.

"The devil is in the details"

It must first be decided which basic consumption is to be used as a basis, i.e. whether it is based on consumption in the previous year or whether per capita consumption is to be set, said the economist Rüdiger Bach in the FAZ podcast for Germany.

“The devil is in the detail.” He and his colleagues have suggested a different model, “where all customers immediately feel the world market price”.

For this, all existing contracts with fixed prices would have to be dissolved.

The customers would then be compensated for the abrupt price increases by the energy companies, and the state would only step in in an emergency.

However, one thing is already clear: the legislative process will probably not go through until November at the earliest.

There was also no decision on the controversial gas levy on Wednesday.

This makes it more and more likely that, as originally decided, it will initially be charged at 2.4 cents per kilowatt hour from Saturday in order to be able to finance the multi-billion dollar support campaign for struggling gas companies like Uniper.

Meanwhile, the debate about a uniform gas price cap is also gaining momentum at EU level.

The European Commission gave in to pressure from the majority of countries and announced that it intends to present initial proposals to the energy ministers at their special meeting in Brussels on Friday.

EU member states are demanding comprehensive gas price caps

Previously, 15 member states from Greece, Italy and France to Poland had asked the Commission in a joint letter to finally submit a proposal for a gas price cap for "all transactions in the wholesale market and not just limited to specific regions".

They were reacting to the fact that Commission President Ursula von der Leyen had previously only proposed a price cap for Russian pipeline gas and stuck to it despite resistance from the member states.

In contrast to the price cap discussed in Berlin, the Brussels debate is about limiting the price that countries like Russia, Norway or Algeria get for their pipeline gas, but also about the price that the EU is currently paying for liquefied gas ( LNG) pays.

The letter, which is available to the FAZ, does not reveal how the signatories of the letter envisage the lid in concrete terms.

Proponents of the price cap argue that the EU is currently paying up to ten times the price of gas as the United States and twice what is paid in Asia.

Critics of the idea, which include Germany and the Netherlands, warn that suppliers could simply stop delivering if the EU caps prices.

According to information from the FAZ, the Commission is therefore working on an approach that provides for a "dynamic price cap".

This would always cap the price at a certain amount above the current price in Asia.

It would therefore theoretically be more attractive for the supplier to still sell their gas in Europe.

However, economists are skeptical that this calculation could work out because the suppliers could then not have sufficient margins.