The German economy ministry plans to subsidise 80 per cent of the electricity cost for energy-intensive companies, in a proposal likely to fuel divisions inside the governing coalition government and further alienate European nations who cannot afford such measures.
Under a proposal published by Green economy minister Robert Habeck, a large part of German industry would be offered electricity at a subsidised price of 0.06 euros per kilowatt hour (kWh) until 2030.
The plan, which would cost an estimated 25-30bn euros, is aimed at bolstering German manufacturers in sectors such as chemicals, steel, metal and glass, as well as encouraging European investment in industries seen as crucial to reducing EU dependence on China, such as the production of solar panels and semiconductors.
The economy ministry said that Germany needed to respond to ‘tough international competition’ in these sectors that was ‘not taking place on a level playing field’ due to huge subsidies in China and, more recently, in the US due to Joe Biden’s Inflation Reduction Act (IRA).
Habeck’s proposal argues that energy intensive industries are facing an ‘existential threat’ as they struggle with the surge in electricity prices triggered by sanctions on Russia while also seeking to rapidly decarbonise – a process that often leads to higher electricity consumption.
But the plan has already faced strong opposition from within chancellor Olaf Scholz’s deeply divided three-way coalition.
Germany’s Federal finance minister, Christian Lindner, who this week warned that ‘extremely expensive subsidies’ were the ‘wrong approach’, describing them as unfair and inefficient.
Lindner, who has also locked horns with Habeck on a plan to ban new gas and oil heating from next year, explicitly rejected the vice-chancellor’s proposal to use funds from the 200 billion ‘protective shield’ earmarked to shield German households and industry from Russian sanctions.
A spokesman for Scholz said that the chancellor believed in ‘electricity prices that industry and consumers can afford without being permanently subsidised’.
He added: ‘We now have to discuss exactly how to get there.’
The proposed subsidy also risks exacerbating tensions within the EU, where many member states are concerned Germany’s economy, which is the largest in the EU, is in danger of exploiting industrial policy and its larger economy to offer help to industry that other nations cannot afford to replicate.
- Meanwhile, in France police have made widespread use of ‘preventive’ arrests to quell protests against President Emmanuel Macron’s deeply unpopular pension reform, France’s chief inspector for prisons Dominique Simonno wrote in a report, adding her voice to the chorus of condemnation of police tactics.
The damning report, which was sent to Interior Minister Gerald Darmanin last month, highlights ‘serious breaches of fundamental rights’ and voices concern about the ‘trivialisation’ of police custody ‘without legal basis’.
It is based on investigations carried out at multiple police stations in Paris in late March, following two nights of violent clashes triggered by Macron’s decision to force his pension reform through parliament without a vote in mid-March.
In a letter sent to Darmanin on April 17th, the chief inspector of prisons Simonnot, flagged ‘alarming shortcomings’ in the work of officers who carried out the arrests, blaming police chiefs and public prosecutors for encouraging ‘preventive’ – or even arbitrary – arrests.
She added: ‘Some officers had been given instructions and orders from their superiors to carry out indiscriminate arrests in given sectors of the French) capital.’
Simonnot also found out that only 20 per cent of arrests resulted in charges being brought.
The widespread unrest has revived a longstanding debate on French policing, once again highlighting the lack of checks on law enforcement in a country where the interior minister, who is in charge of police oversight, is commonly referred to as ‘France’s top cop’.
In a written reply to the inspector, Darmanin contested the report’s conclusions, stressing the difficulty of collecting evidence of offences during violent and chaotic clashes.
He also accused Simonnot of exceeding her jurisdiction, arguing that her office is tasked with monitoring the ‘conditions’ of police detentions – but not their ‘appropriateness’.
Police Prefect Laurent Nunez, the French capital’s police chief, has repeatedly claimed that, ‘there is no such thing as preventive arrests’.
In Paris alone, several hundred people were detained during the first three days of protests triggered by Macron’s decision to bypass parliament on March 17th.
All but a handful were released within 48 hours without being charged.
Lawmakers from the left-wing opposition La France Insoumise have denounced a campaign aimed at intimidating protesters with threats of arrest.
They notably flagged Darmanin’s wrongful claims in the media that taking part in undeclared protests constitutes ‘an offence’.
The widespread arrests have also caught the eye of human rights monitors both in France and abroad, including Amnesty International, which has documented arbitrary arrests by French police in the past.
- French trade unions the the CFDT and Force Ouvriere (FO) have joined the CGT in announcing a new nationwide day of protests on June 6th against Macron’s decision to increase the retirement age by two years to 64.
A joint union statement said: ‘There is a deep distrust, and dialogue can only be re-established if the government proves its willingness to finally take into account the proposals of the trade unions.’
Opinion polls show a substantial majority of French people oppose the higher retirement age.
Police clashed with hundreds of black-clad anarchists in Paris and other cities during May Day union-led protests against the pension reform.
On Wednesday 3rd May, France’s Constitutional Council rejected a new bid by the opposition to organise a citizens’ referendum on the pension reform. It rejected a previous request last month, clearing the way for approval of the bill.
Bertrand Pancher, an MP who leads the Liot group, welcomed the unions’ decision to call for a day of strikes and protests ahead of the vote on their legislative proposal to scrap the retirement age increase.
‘It’s only by joining forces that we can convince the lawmakers we need to vote the text and the government to back-track,’ he said.
Macron’s centrist Renaissance group and their allies don’t have an absolute majority in parliament, but are still the biggest group.
Pancher said he hoped to convince a number of conservative Les Republicains to back his bid and give it a chance to succeed.
