State emergency measures against high energy costs extended until 2024: Impact on the economy

State emergency measures against high energy costs extended until 2024: Impact on the economy

According to a report by www.sueddeutsche.de, the EU Commission has agreed to allow state emergency measures against high energy costs until the summer of 2024. This enables EU countries to reimburse companies for part of the additional energy costs for longer than originally planned. The state aid rules were relaxed in the wake of the Russian attack on Ukraine in order to cushion the economic consequences. Berlin campaigned for the renewed extension of the “temporary crisis framework”, which means that measures such as the gas and electricity price cap can theoretically be maintained.

However, Economics Minister Robert Habeck expressed doubts as to whether there would still be enough money available for these emergency measures following a ruling by the Federal Constitutional Court. The court prohibited Corona loans from subsequently being reallocated for climate protection and the modernization of industry, which led to a financial hole of 60 billion euros in the climate and transformation fund. It remains unclear how the traffic light coalition will fill this hole.

The EU Commission is also extending measures to cushion the consequences of sanctions and other effects of war for companies. Affected companies can expect support amounts that can be up to 2.25 million euros, depending on the sector.

These government emergency measures and funding uncertainties may have a significant impact on the market. Companies could continue to benefit from government support, which could impact competitiveness and pricing. Financing uncertainty could also impact investment and innovation in the energy sector. Consumers could be affected by market distortions caused by government intervention and face higher energy costs if uncertainty about financing continues.