Workers at the Kexerei bakery, Dresden, are kneading mounds of raisins-flecked dough. The air is buttery and warm. It is the busiest season of the year, but like all businesses and households in the country, the company’s bills are increasing, which reduces the festive cheer.
Matthias Walther, the owner, says that “wages have increased dramatically, energy costs have risen and prices for our ingredients have risen – butter has increased in price by twofold.” “I cannot pass all this on to my customers.”
The German government is also concerned about this issue. It is concerned about the economic impact and has spent around EUR300bn ($310bn;PS260bn) to protect the economy and people from rising prices.
One-third of this sum has been spent already, and EUR200bn is expected to be added in the next months.
The promise to pay a monthly fuel bill for all households and small business in December is perhaps the most striking. The amount will be calculated using a monthly average September gas bill.
The benefits have increased and nearly everyone has received a one time payment of EUR300.
Gas and electricity bills will be limited starting in January. Small businesses and households will be able to pay lower rates for 80% of their gas consumption and 70% of electricity they consume through government subsidies.
A family of four living in a 100 m2 flat would have had to pay a EUR100 monthly gas bill. Now, that’s EUR275. A government projection indicates that the family will have to pay EUR175.
Similar subsidies will also be used to cap industry bills.
No doubt, Chancellor Olaf Scholz wants to improve his home approval ratings. They are at their lowest point since he took office. His spending plans have not impressed his EU neighbors, due to the fact that Germany has rejected proposals to cap gas prices across the EU.
Some EU peers are wondering if Mr Scholz is just trying to place Germany first.
Martin Dulig, economic minister for the region Saxony (of which Dresden is the capital), says “I believe the opposite is true.”
“This is about stabilizing Europe. Germany is the key to Europe’s stability. The world has been reorganized, and the economic centers have changed. Take a look at America or China. Europe must keep up.
His constituency is located in Germany’s former communist east. There, public dissatisfaction about government policies tends to be greater than elsewhere.
“The mood is still challenging because we have a severe situation,” states Mr. Dulig. “For the first-time, we are confronted with an actual social problem. A pensioner who receives EUR850 per month is confronted with a EUR500 monthly energy bill. She can’t afford it. It’s vital that she receives assistance.
The idea behind these measures is to balance out; however, most people will still pay higher energy bills despite the assistance. The government needs households and companies to reduce their consumption after it has struggled to find other sources of energy following years of heavy dependence upon Russia.
Although gas stores are full, the energy network agency of the country says that a 20% decrease in national consumption is required to make it through winter without any problems.
Dresden’s main Christmas market, which reopened after a pandemic pause, is now open again. The question for many is how to keep healthy and how to pay the bills.
Sabine, a retired pensioner, said that the government was incapable of supporting her. They say help is on its way, but nothing is happening.
Jan, a young father says that he believes the family will be okay, but “the gas bill still hasn’t arrived yet. Let’s see what it looks like when it does.”