German energy plan may ‘undermine’ neighbours: France

A French presidency official warned Wednesday that Germany’s “massive” 200-billion-euro plan to subsidise energy costs risks “undermining” some fellow EU nations, calling for better coordination within the bloc.

The official, an advisor to President Emmanuel Macron who spoke on condition of anonymity, said it was “normal and legitimate” for EU members to support households and firms hit by inflation.

“We’re doing it ourselves” in France, the official told journalists.

“What may be at issue is the massive nature of this (German) support, which risks undermining economies with less fiscal space than ours,” she added.

“We have to find the right mechanism to make this legitimate support compatible with how our integrated economies work.”

German Chancellor Olaf Scholz had on Tuesday defended his 200-billion-euro ($200 billion) energy fund against criticism from abroad, saying “the measures we are taking are not unique, but are also being taken elsewhere, and rightly so.”

As well as France, members of the European Commission have also expressed concern about the German plans, suggesting a joint EU-wide scheme instead.

But Germany and other fiscally conservative nations are so far resistant to handing more borrowing and spending powers to Brussels as the bloc did with its coronavirus recovery fund.

The Macron advisor said that there was “awareness on both sides of the Rhine about how energy questions are managed, about the need for coordination and solidarity”.

Macron met Scholz in Berlin on Monday and the pair are scheduled to talk again before a Friday informal summit of EU leaders in Prague.