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

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(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.

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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.)

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