Energy price cap: What the federal states expect from the federal government

After the consultations of the federal states on the energy crisis, they now see it as the federal government's turn.

"Now the traffic light coalition must finally get going and also declare its willingness to tackle the necessary solutions together with us," Thuringia's Prime Minister Bodo Ramelow told the editorial network Germany (RND).

People were waiting for resolute "and unified action," emphasized the left-wing politician.

This was at least successful on the state side.

At a special conference on Wednesday, the heads of government of the federal states discussed, among other things, how to deal with the energy crisis, its consequences and the financing of possible relief for citizens.

Together they called for an energy price cap for electricity, gas and heat in order to limit the explosion in costs for private households and companies.

A round with the Chancellor on these issues was postponed to October 4 because Olaf Scholz (SPD) is currently infected with the corona virus.

No agreement on the debt brake

According to Berlin's Governing Mayor Franziska Giffey (SPD), the issue of the debt brake was particularly controversial among the federal states.

The question of whether new loans should be taken out to finance relief "we could not finally clarify," said the deputy chair of the Prime Ministers' Conference after the deliberations.

At the same time, she saw the federal government as having a duty.

"At this point, we also have a clear demand from the federal government that such an energy price cap can only be financed nationwide by the federal government," she told the RTL broadcaster.

The federal states are ready to make their contribution to the relief, "but the energy price cap must be passed by the federal government," she made clear.

She had previously signaled that costs in the hundreds of billions could be expected.

North Rhine-Westphalia's Prime Minister Hendrik Wüst (CDU) called for the deliberations on the relief package presented by the traffic light coalition to be embedded in a comprehensive overall concept.

The federal government would have to pay more for the housing benefit reform, the regionalization funds, the refugee costs and hospitals.

North Rhine-Westphalia's Economics Minister Mona Neubaur (Greens) said that the federal government would have to bear a "significantly higher than the planned share of the burden".

Skim off excess profits and chance profits from energy companies

Mecklenburg-West Pomerania's Prime Minister Manuela Schwesig (SPD) said after the deliberations that the states were in agreement that "surplus and accidental profits" from the energy companies should be skimmed off to finance an energy price cap.

Brandenburg's Prime Minister Dietmar Woidke (SPD) spoke out in favor of an exemption from the debt brake in order to finance the energy price brake.

Schwesig, on the other hand, remained cautious on the subject: "There are several federal states that have made a protocol note that they see this extraordinary emergency (...) as a basis for making an exception to the debt brake in case of doubt.

We'll see if that's necessary," she said on Wednesday evening.

According to her spokesman, Mecklenburg-Western Pomerania carried the note.

Within the traffic light government in the federal government, a possible suspension of the debt brake is controversial.

The FDP with Finance Minister Christian Lindner has so far been strictly against it.

The Union-led countries are skeptical and are demanding that the traffic light government made up of the SPD, Greens and FDP first question projects from the coalition agreement in view of the dramatic situation.

The taxpayers' association also sees scope for the federal states to participate in the financing.

"I see that the federal states are currently piling up billions in surpluses, while the federal government is getting deeper and deeper into crisis mode and stuck in its debts," said the association's president, Reiner Holznagel, the editorial network Germany (RND / Thursday).

He called for the energy and inflation crisis to be tackled with equal vehemence at all levels of government.

"It must not be that the federal government becomes a single player and the states comment from the sidelines."

DIW: Energy price brake best option

The German Association of Towns and Municipalities supported the demand for an energy price brake.

You can "really help the people, the municipalities, but also the medium-sized economy," said the general manager of the German Association of Towns and Municipalities, Gerd Landsberg, the "Rheinische Post".

It is important that an energy price brake covers all energy sources.

The social association VdK called for “an affordable basic quota of gas and electricity for all households”, as VdK President Verena Bentele told the RND.

"The cold season is here, and more and more people are afraid of the high gas discounts and energy bills in their mailboxes because the money is no longer enough." To finance the relief measures, she proposed a "fair wealth tax" and the "taxation of large crisis profits". before.

The President of the German Institute for Economic Research (DIW), Marcel Fratzscher, also supports demands for an energy price cap.

"In principle, there are certainly better solutions than an electricity and gas price brake, but such a brake is the best option in this emergency," Fratzscher told the newspaper "Rheinische Post" according to the preliminary report.

"If you design it wisely, it can set the right incentives for savings and create a noticeable relief for companies and people with middle and low incomes." When trying to find a solution, politicians must above all ensure that people with low incomes are sufficiently would be relieved that a solution would be found and implemented quickly and that this solution was also "reliable for the next two winters".