Germany to Make ‘Billions’ Off Energy Firm Levy, Scholz Says

(Bloomberg) -- Germany’s government expects to receive a large revenue boost by tapping windfall profits generated by energy companies if they keep benefiting from disruptions in Europe’s electricity market, Chancellor Olaf Scholz said Sunday.

Most Read from Bloomberg

• Russia Privately Warns of Deep and Prolonged Economic Damage

• World’s Deadliest Roads in Focus After Billionaire’s Fatal Crash

• Amazon Closes, Abandons Plans for Dozens of US Warehouses

• California Avoids Blackouts With Bigger Test Ahead as Heat Looms

• NASA’s Artemis Rocket Is a Gigantic Waste of Money

Germany will take in “many, many billions” of euros under the scenario and would use the revenue to help consumers hit by rampant inflation, Scholz said in an interview with broadcaster ZDF on Sunday.

The government will use “earnings that exceed a threshold at companies that don’t have such high production costs and give it back to the citizens,” Scholz said. He also expressed confidence that Europe’s biggest economy won’t face power blackouts.

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 levies on windfall profits as surging earnings at some energy companies amid rising electricity prices cause public outrage.

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.

The decision by Russian supplier Gazprom PJSC on Friday not to restart the pipeline as planned after three days of maintenance has deepened the crisis. Europe is now bracing for energy rationing this winter and perhaps even electricity blackouts.

Scholz told ZDF his government is doing everything possible to prevent blackouts.

“I am also very certain” that such a scenario won’t unfold this winter, he said.

(Updates with Scholz comments on avoiding blackouts.)

Most Read from Bloomberg Businessweek

• Women Who Stay Single and Don’t Have Kids Are Getting Richer

• A New Contaminant Found in Popular Drugs Could Cost Big Pharma Millions

• Mark Zuckerberg’s Metaverse Pitch Is Falling Flat

• Startup Wants to Chart Path to More Equitable Urban Development

• Russia’s Conspiracy-Theory Factory Is Swaying a Brand-New Audience

©2022 Bloomberg L.P.