BERLIN – Germany's finance minister proposed a “crisis discount” Monday to dampen the impact of recent fuel price hikes due to the war in Ukraine.
The fuel subsidy proposed by Finance Minister Christian Lindner could see gas prices cut by more than 0.2 euros per liter (about $.08 a gallon), German media reported.
“The state mustn't leave citizens and businesses alone with rising prices,” said Lindner.
He said the measure has yet to be agreed upon by the three-party governing coalition, but he hoped Cabinet could approve it as part of a broader package Wednesday.
Conservative opposition lawmakers have called for even bigger fuel subsidies, while environmentalists warn that the proposed discount could distort the energy market, discourage efforts to save gasoline and disproportionately benefit rich people who drive a lot.
Members of the Green party in the German government suggested that the new measures should include introducing a speed limit on the country's highways to curb fuel use. A spokesman for the environment ministry, Christopher Stolzenberg, said a speed limit was “good for protecting the climate, protecting resources and safety on the road.”
“Whether this is something that we will tackle next is ... being discussed,” he said.
Lindner declined to comment on proposals for a speed limit, which his party, the pro-business Free Democrats, have previously opposed.
Other European countries have also taken measures recently to cushion consumers from the economic consequences of the war in Ukraine.
The Swedish government on Monday proposed a temporary reduction in fuel tax and other financial aid to retirees, low-income families with children and car owners.
“Russia’s illegal invasion of Ukraine creates more insecurity in our world and in our economies. It will affect us for a long time and my message to the Swedish people is this will be a test,” Finance Minister Mikael Damberg said at a press conference.
Sweden's Social Democratic minority government presented an aid package worth 14 billion kronor ($1.6 billion) that needs approval in the 349-seat Riksdagen.
Jan M. Olsen in Copenhagen contributed to this report.
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