Germany’s government stands to receive a large revenue boost from a planned levy on windfall profits generated by energy companies, German Chancellor Olaf Scholz said Sunday.
(Bloomberg) — Germany’s government stands to receive a large revenue boost from a planned levy on windfall profits generated by energy companies, German Chancellor Olaf Scholz said Sunday.
The government will take in “many, many billions” of euros from the measure if companies continue to benefit from dislocations in Europe’s electricity markets, Scholz said in an interview with public broadcaster ZDF on Sunday. The revenue will be used to help consumers hit by rampant inflation.
The government will “take the windfall profits — earnings that exceed a threshold at companies that don’t have such high production costs — and then give it back to the citizens,” Scholz said.
The German government earlier Sunday presented a 65 billion-euro ($65 billion) package to help citizens and companies cope with surging energy prices. It promised to support a European Union effort to introduce taxes on windfall profits as surging earnings at some energy companies on the back of rising electricity prices have caused widespread public outrage.
Read More: EU Mulls Energy Price Cap, Windfall Tax Over Russia Gas Risk
Germany has faced an energy crisis since Russia decided to all but shut down gas deliveries through the Nord Stream 1 pipeline in retaliation for Western sanctions imposed for President Vladimir Putin’s invasion of Ukraine. Russian supplier Gazprom PJSC said Friday it wouldn’t restart the pipeline as planned after three days of maintenance.