Skyrocketing Profits Made by German Energy Companies Force Authorities to Re-consider Aid

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Germany is looking to limit companies able to access the new gas levy to organizations needing assistance. The government is now set to put stringent scrutiny in place following an outcry over skyrocketing profits generated by some energy companies. 

The government reportedly issued a new levy to consumers as it works on funding aid for suppliers who have had to pay higher prices on the back of Russia’s dwindling gas supply to Europe. Following the outcry from consumers, Germany’s Economy Minister, Robert Habeck, has now said that it is working on an action plan to prevent some gas importers from exploiting loopholes in the aid. 

Previously, the government launched the aid initiative after indications that the failure of gas importers to import gas due to rising prices could trigger a broader disruption in Europe’s largest economy. While the decision sounded like a brilliant idea, it has now caused a political backlash, with the opposition urging the center to rethink the decision. 

In addition to the backlash stemming from the new aid for energy importers, there are also calls to increase the tax burden on energy companies whose profits have surged due to the crises. That said, Finance Minister Christian Lindner has quashed the probability of such a move. 

Arguments from opposing blocks

According to the country’s Economy Minister Robert Habeck, “it doesn’t sound morally right for companies who have benefited from the energy crises to request government handouts.” It should be recalled that twelve companies applied for assistance up to 34 billion euros a few months ago. 

While the government is working on ensuring that only companies who truly need the assistance get it, it is also trying to ensure that no lawsuit stems from displeasure among parties involved. Should that happen, the government warns that companies and end users will have to contend with limited gas supply, a scenario it is working to prevent. 

German authorities added that they would continue to review the aid to ensure that any possible loophole is blocked, ensuring that only companies that fairly need the assistance could access it.

Nitish Vaibhav
Nitish Vaibhavhttp://thetradingbay.com
Nitish Vaibhav is the Founder of the The Trading Bay. A computer science engineer turned an Entrepreneur 5 years ago. He has been in trading since 4 years in Forex and Crypto using his price action strategies. Involved in Content Creation full time for 3 years, Nitish is top rated writer on many content writing websites. He is also a YouTuber in India making videos about Crypto and Forex.

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