Germany To Borrow €200 Billion For Energy As Inflation Nears 11%

Germany To Borrow €200 Billion For Energy As Inflation Nears 11%

Markets were handed another stunningly dire German inflation outcome on Thursday. The harmonized gauge showed consumer prices likely rose 10.9% in September on a YoY basis (figure below), and 2.2% from August. The 12-month print easily exceeded analysts' estimates and was the highest reading since the introduction of the euro. Consensus expected a 10.2% gain. The national measure likewise reached double-digits, rising 10% from September of 2021. Some of September's CPI surge was due to the
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One thought on “Germany To Borrow €200 Billion For Energy As Inflation Nears 11%

  1. It seems Germany is approaching things very differently, and more intelligently, than the UK.

    Germany will spend huge sums to blunt the impact of energy prices on households, but will also cut energy usage and impose windfall taxes to partly offset the cost. €300BN is about 7% of GDP, but windfall taxes might trim that to 5% ish.

    Germany seized Gazprom’s storage facilities, filled them to near 90%, leased 4 or 5 floating regas ships for immediate regas capacity, fast-tracked permitting for land based regas facilities, nationalized its main gas utility, restarted coal plants, is keeping two nuclear plants open. And the EU still has the option of decoupling electricity price from gas price.

    Compared to the UK . . .

    “[German] Finance Minister Christian Lindner insisted that the fund would not entail further regular borrowing, saying Germany is “expressly not following Great Britain’s path.”

    The U.K. government recently announced tax cuts funded by borrowing despite plans to spend billions shielding homes and businesses from soaring energy prices, resulting in a sharp fall of the pound this week.”

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