European Commission examines Germany’s 200 billion euro bailout plan

BRUSSELS (Reuters) – The European Commission, responsible for ensuring compliance with competition law in the European Union, said on Monday it was discussing with the German government the 200 billion euro aid plan it has unveiled for protect its economy against soaring energy prices.

Voices were raised in Europe to denounce the extent of this price shield aimed at limiting the impact of the rise in natural gas and electricity prices, arguing that it would distort competition within the EU by giving a considerable comparative advantage to German companies.

“We are fully committed to preserving a level playing field and the single market, and to avoiding a harmful subsidy race,” a Commission spokesperson told a press conference.

“What I can say is that we are in contact with the German authorities about this,” he added without further details.

After the announcement of the German aid plan, the European Commissioner for the Internal Market, the Frenchman Thierry Breton, called on Twitter on Friday for respect for “fair rules of the game” within the Twenty-Seven, wondering about the “margins of manoeuvre” available to other countries.

Commission President Ursula von der Leyen stressed in a speech on Saturday that the EU must find a “common response” to the energy crisis.

The extent of the tariff shield proposed by Berlin also risks complicating the task of the European Central Bank (ECB) as it tries without much success to control inflation in the euro zone, which has reached 10%.

Eurozone finance ministers meeting in Luxembourg on Monday are expected to insist that aid aimed at limiting the rise in energy prices must be temporary and targeted.

(Report by Philip Blenkinsop, French version Tangi Salaün, editing by Kate Entringer)