Public transport fares cut by ten, fuel taxes lowered, 300 euro bonus: how Germany is trying to soften the energy crisis

The ruling coalition presented an ambitious plan on Thursday, both for individual cars and for buses and metro. With one objective: to get out of dependence on Russian gas.

“Taking the bus and train will probably never have been so cheap in Germany”, triumphed the co-leader of the Greens party, Ricarda Lang, by unveiling this Thursday a program on mobility supposed to respond to soaring gasoline prices and dependence on Russian hydrocarbons. And among the most dramatic measures, the ruling coalition in Germany has announced that it will temporarily reduce the price of public transport in order to encourage users to leave their cars.

Passengers will only pay 9 euros per month for 90 days for local public transport. For comparison, the monthly package is 86 to 107 euros in Berlin, 59 to 118 euros for the first three zones in Munich or even 71 to 114 euros in Hamburg. The Lander will receive from the State the difference between the current tariff and that provided for in this plan. “We want to encourage users to make more use of local public transport where possible”, added Social Democratic Party (SPD) co-chairman Lars Klingbeil.

This announcement is one of the measures of a major budgetary aid plan presented after intense discussions between the three coalition parties SPD, Greens and Liberals. This program of several billion euros aims to reduce household bills which have soared with the rise in energy costs in the context of the war in Ukraine.

65% renewable energy for new heating systems

A package of measures which also includes for all taxable employees an exceptional payment of 300 euros. The poorest households will be granted additional aid of 100 euros, as well as a bonus of 100 euros per child, in addition to family allowances. The energy tax on fuels will also be reduced for three months and brought back “at the minimum European level”, ie a reduction of 30 cents per liter for petrol and 14 cents per liter for diesel. A discount of 15 cents per liter had been recorded on the other side of the Rhine by Jean Castex two weeks ago.

Other announcements aimed at getting Germany out of its dependence on Russian gas have also been announced. From 2024, every newly installed heating system will have to run on 65% renewable energy, a year earlier than the coalition agreement previously called for. Measures on heating systems and heat pumps will also be specified shortly.

The overall amount of this aid plan has not yet been quantified, said Finance Minister Christian Lindner, but the government had already announced that it was planning a budget extension and an increase in new debts planned for the year 2022. “Given these huge price increases, the coalition is convinced that we need to protect people and the economy in the short term, for a limited period of time,” explained Christian Lindner.

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