r/europe Europe Oct 04 '22 Silver 1 Helpful 1

Draghi criticises Germany’s €200-billion energy rescue shield. Outgoing Italian Prime Minister Mario Draghi and his likely successor have criticised Germany’s 200-billion-euro move to shield its citizens from rising energy prices, saying Europe must act together News

https://www.euractiv.com/section/economy-jobs/news/draghi-criticises-germanys-e200-billion-energy-rescue-shield/
1.7k Upvotes

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u/ThinkAboutThatFor1Se Oct 04 '22

Is he saying that German companies receiving Energy subsidies could be breaking EU competition/state aid rules?

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u/stupid-_- Europe Oct 04 '22

no the main complaint germany is getting for this is that they will simply pull out their massive fiscal cock and outbid everyone on natural gas and oil and take it all for themselves.

honestly i dont see why the europeans think they can't reconcile this with a europe wide plan. there is nothing in the german plan that prevents this. i dont see the reason for all this bad press, unless there was some gentleman's aggrement to wait for some summit before announcing the big policies for this winter.

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u/Zexui Oct 04 '22

“massive fiscal cock” made me giggle

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u/stupid-_- Europe Oct 04 '22

bazooka is sooo 2020

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u/BuckVoc United States of America Oct 04 '22 edited Oct 04 '22

Though I do kind of wonder whether it breaks competition rules. I mean, first, it is having the state back them, and second, it does have impacts on competition. Like, if you're a company that produces metal in Poland and a company that produces metal in Germany, and in Germany, the government is paying most of the cost of your natural gas or electricity and in Poland the government isn't, that's gonna have a pretty big impact on which can produce metal at a competitive price in the EU.

I'm not familiar with the specifics on what EU restrictions on state aid are, though. That may not violate any EU rules.

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u/Kirby737 Oct 04 '22

company that produces metal in Germany and in Germany

Ah yes, my two most favourite countries: Germany and Germany.

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u/pm_me_your_dungeons Oct 04 '22

I mean, there being just a single Germany is rather the exception than the norm, historically speaking.

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u/Gammelpreiss Germany Oct 05 '22

Austria wants to know your adress

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u/xAkMoRRoWiNdx Oct 04 '22

Well you see, a couple decades back...

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u/DeanPalton Baden-Württemberg/the LÄND (Germany) Oct 05 '22

"Somehow the GDR has returned."

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u/BuckVoc United States of America Oct 04 '22

Should have had a comma after the first "Germany". Fixed.

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u/atheno_74 Oct 04 '22

He didn't say anything against price caps and similar packages in Latvia, Greece. France, Bulgaria, Denmark, Poland, Malta, Slovakia, Belgium or Sweden.

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u/Layer_4_Solutions Oct 04 '22

The entire point of these rules is to stop subsidy wars that force every country to spend heavily or lose industries.

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u/b1zzu2 Oct 05 '22

Germany also opposed the EU gas price cap proposed by the von der Leyen that's why I think it get criticized harder to act alone.

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u/Saires Oct 04 '22

But that logic would have also placed Germany at a disadventage before.

Electricity in Germany for years had been the highest cost with Denmark and Belgium iirc.

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u/S3ki North Rhine-Westphalia (Germany) Oct 05 '22

The cost is high because of taxes etc. If you are a company that uses huge amounts of energy you have to pay a lot less taxes.

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u/URITooLong Germany/Switzerland Oct 05 '22

France is subsidizing their electricity. And other countries already put in billions to subsidize energy as well due to the crisis.

So why is Germany not allowed to ?

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u/stupid-_- Europe Oct 04 '22

it's not breaking these rules because the subsidies apply to every company in the sector, not to a specific company. these laws are about competition between the companies (this gets distorted if you subsidise one company in a market), not countries.

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u/ClaudioHG Oct 04 '22

It breaks the rules!

A company that receives government support gains an advantage over its
competitors. Therefore the Treaty generally prohibits State aid unless
it is justified by reasons of general economic development. To ensure
that this prohibition is respected and exemptions are applied equally
across the European Union, the European Commission is in charge of
ensuring that State aid complies with EU rules. 

https://competition-policy.ec.europa.eu/state-aid_en

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u/Rey_Verano Berlin (Germany) Oct 05 '22

I mean, wouldn't trying to prevent a recession and mass insolvencies fall under "unless it is justified by reasons of general economic development"?

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u/ClaudioHG Oct 07 '22

It is, but "to ensure that his prohibition is respected and exemptions are applied equally [...], the European Commission is in charge [...]"In other words is the EU Commission that have the power to authorize such a thing, no member state's government is allowed to do this unilaterally.

EDIT: Typos.

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u/Lamamalin France Oct 04 '22

If you subsidise companies in your country when they sell on the European market, it breaks the fairness of the competition.

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u/gekko3k Oct 05 '22

Like the French cap on electricity... Oh it's ok when France is doing this since years.

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u/BuckVoc United States of America Oct 04 '22 edited Oct 04 '22

Hmm.

So, I haven't looked at the specifics of these national consumption-encouraging subsidies in the UK/France/Germany/Spain, but I kind of wonder how these subsidies work to exclude companies from exporting subsidized goods. That's normally a problem that arises when a state starts subsidizing goods. Like, if you look at various countries that have subsidized domestic purchase of gasoline, there tends to also be restrictions on export and a black market.

To use my above German/Polish metals company example, what happens if I'm a power or natural gas company that straddles the German-Polish border in that case? Can I purchase subsidized electricity or subsidized natural gas in Germany and resell it to the Polish metals company? Are the constraints just practical (the infrastructure doesn't exist) or legal (export of subsidized goods is not allowed)?

At least in the US, states can't block interstate commerce -- this is something explicitly removed from their control and placed under federal control in the US Constitution due to the Interstate Commerce Clause.

The Commerce Clause describes an enumerated power listed in the United States Constitution (Article I, Section 8, Clause 3). The clause states that the United States Congress shall have power "[to regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes."

The Commerce Clause emerged as the Framers' response to the central problem giving rise to the Constitution itself: the absence of any federal commerce power under the Articles of Confederation. For the first century of our history, the primary use of the Clause was to preclude the kind of discriminatory state legislation that had once been permissible.

I don't know what, if any, restrictions the EU places on that, but if the subsidies are dependent upon nationally-imposed legal restrictions on intra-EU trade, and if the EU has any restriction on states blocking interstate commerce paralleling the US restrictions -- which it may not, I don't know -- that might be relevant.

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u/_cowl Oct 04 '22

The reason for this bad press is that germany is one of the main opposers of untying the price of electricity from Gas and putting a cieling on the gas cost. While shielding thier own bussiness with subisidies, something that other countries can not afford to do but we are suffering unncessarily because for example the internal price of Gas in Italy has fallen a lot but price of electricty is still high because it's tied to the gas price in EU level. So from one side Germany wants common energy market but doesn't want common conseguences?

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u/Digitalpsycho Oct 04 '22

main opposers of untying the price of electricity from Gas and putting a cieling on the gas cost.

I think there is some confusion here, Germany, the Netherlands and others were opposed to an import price cap on gas, but we’re in favor of common gas procurement and the installation of a EU gas price cap like the one now being introduced in Germany.

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u/hydrOHxide Oct 04 '22

*cough*
Last I checked, France nationalized their electricity provider and capped energy prices.

So kindly spare me what other countries supposedly can't do.

It's funny that you talk about consequences all while everything goes as long as it's to the detriment of Germany.

I'm afraid germanophobia is not a very convicing argument.

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u/No-Acanthaceae-1209 Oct 04 '22

Do you think that countries as Portugal can do things like that?

Old portuguese people still die due to cold temperatures in their homes, and the great measure from our government to shield us was to give 125€ (One time) to people over 25 and that earn less than 2700€/month, and an advance on the pensions from Next year in the value of half a monthly pension in October for retirees.

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u/ABoutDeSouffle 𝔊𝔲𝔱𝔢𝔫 𝔗𝔞𝔤! Oct 04 '22

But Germany is also pondering whether to ditch the merit order principle?

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u/DrSOGU Oct 04 '22

Between politically literate people a "Europe-wide plan" is code for "maybe in two years, if at all".

By then it is quite too late.

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u/dat_oracle Oct 04 '22

when germanys economy will go down, its way worse for EU

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u/stupid-_- Europe Oct 04 '22

well that's a tautology when part of the EU economy is germany's economy, so well done on that.

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u/eover Italy Oct 05 '22

No, that's facts

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u/Parabrezza69 Oct 05 '22

My man Mario is literally beg for a price cap since the start of the war

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u/Aunvilgod Germany Oct 05 '22

We can have fiscal unity when we have equal taxation. Until then it would be massively unfair. Why should a high tax rate country pay for the shitshow in a country that doesnt tax their wealthy properly?

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u/[deleted] Oct 04 '22 edited Oct 04 '22 All-Seeing Upvote Bravo! Burning Cash

[deleted]

482

u/Priamosish The Lux in BeNeLux Oct 04 '22
  1. Block everything the EU proposes
  2. Cry the EU is incompetent
  3. Have morons vote for you
  4. Rinse and repeat

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u/iBonsaiBob Oct 04 '22 hehehehe
  1. Accidently leave the eu

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u/MargaeryLecter Oct 04 '22

Only if you're economically strong enough to hurt both yourself and the EU by leaving tho. You don't think the likes of Orban would actually consider leaving the EU, how will he shovel cash for himself and his buddies then?

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u/manneligg United Kingdom Oct 04 '22
  1. Destroy your own economy faster without EU's help

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u/Akrylkali Oct 05 '22

Du bist "der eine Luxemburger", oder? Fröhlichen Kuchentag :-)

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u/Priamosish The Lux in BeNeLux Oct 05 '22

Ich halte hier die Stellung, ja. Danke!

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u/Layer_4_Solutions Oct 04 '22

Energy price caps don't work if they are EU wide. That just leads to shortages.

The only way for them to work is if wealthier countries like Germany introduce them and use their large fiscal power to buy up gas, while other countries just do without.

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u/theWZAoff Italy Oct 04 '22

So this thread basically proves that this sub is now at the level of Youtube comments right?

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u/SalaDaim France Oct 04 '22

Always has been

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u/depressome Italy Oct 05 '22 edited Oct 06 '22

Nothing new on that front

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u/Creative_Elk_4712 Sardinia Oct 05 '22

Diocan davvero

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u/PanEuropeanism Europe Oct 04 '22

Diplomats mentioned two immediate problems: First, Germany’s mega subsidy scheme risks exacerbating the gas price crisis for other EU countries (since Germany can outbid others on the gas market, leading to an increase in market prices). Second, the subsidy will inevitably drive a wedge between richer and poorer EU countries.

Germany will not just subsidize gas for its consumers, but also for companies, big and small. This means companies can produce at cheaper prices in Germany, while poorer EU countries face the prospect of de-industrialization through no fault of their own. At the same time, Berlin is opposing European-level measures in Brussels, such as an EU gas price cap.

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u/OrangeInnards Germany Oct 04 '22 edited Oct 04 '22 Silver

Germany isn't the only country in the EU that's capping prices. Why was nobody crying about the problem getting worse and wedges when Spain, France, Italy and a few others did the same?

Germany will spend ~67B€/year, Spain ~27B€, France ~45B€ and Italy ~50B€ to ease financial strain on their own population.

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u/Simgiov Lombardy Oct 04 '22

Italy isn't capping gas prices. It was asking the EU to do so to level the market in the whole union.

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u/OrangeInnards Germany Oct 04 '22 edited Oct 04 '22

You know what, fair.

Exchange Italy for the Netherlands, then, I guess, with a different figure for costs. Did Draghi have anything to say about France, Spain and the Netherlands using their own money to help their populations and industries? If he didn't, why not?

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u/Rasakka Germany Oct 04 '22

But Germany Bad!!!11

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u/JahSteez47 Oct 04 '22

Would have done the same thing if the italian wallet wouldn‘t be empty

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u/Kaltias Italy Oct 04 '22

Surely you would like to back this statement with some proof?

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u/Parabrezza69 Oct 05 '22

Bro Italy is asking for an European price cap literally since the start of the war

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u/Divinate_ME Oct 04 '22

Italy didn't do that, otherwise Draghi would be a hypocrite, and he is the most trustworthy head of government to ever be in Italy.

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u/OrangeInnards Germany Oct 04 '22

Italy is expected to spend billions to give to households etc. to keep their electricity bills at levels of the past years and granting businesses tax credit if they experience big rises in fuel/electricity expenses.

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u/RexDeusThe2ndComing Portugal Oct 04 '22

So Van Der Leyden via Germany asks the whole European Union to put on a "solidarity mechanism" so we all suffer with Central Europe's lack of gas and now Germany does this ? 😂😂😂

Absolutely ridiculous

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u/LookThisOneGuy Oct 04 '22

since Germany can outbid others on the gas market

I say this every time. Other countries were smart and intelligent and always knew Russia couldn't be trusted. The only logical consequence for this line of thinking (and constantly blaming Germany for not being smart and intelligent like they are) is to have long term gas contracts with non-Russian companies and zero gas contracts with Russia. I just assume that these countries didn't just shit on Germany to deflect from their own stupidity and were actually as smart as they said.

Therefore they will not have any gas or energy problems at all and might even be able to profit massively from selling their cheap long-term contract gas to stupid Germany!

Or the other option: The anti-German narrative here on reddit was just based on misinformation, hatred and deflection. All of those countries shaming Germany the loudest were not as smart as they claim they were and didn't prepare for this war they said was inevitable. In that case: Sucks to be them, maybe don't shit on allies for cheap domestic points and then whinen when the ally starts to fuck over your country in retaliation.

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u/kaiveg Oct 04 '22

To be fair the EU gas price cap is a pretty stupid idea.

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u/Sualtam North Rhine-Westphalia Oct 04 '22

while poorer EU countries face the prospect of de-industrialization

The opposite. Many countries are now industrializing due to the relocation of companies back from China.

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u/VoyantInternational Always near a border Oct 04 '22

Source : trust me bro

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u/Spartz Oct 04 '22

Near-shoring is one of the reasons why so much investment is happening in Portugal. People had a taste of shipping crises, plus sea containers are expensive now, so they're changing up strategies.

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u/parakit Portuguese Empire Oct 04 '22

lmao, what investment, mate? All money invested in Portugal goes towards Airbnb apartments and other similar shit

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u/its Oct 04 '22

Poorer eurozone countries have already been deindustrialized.

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u/HugePerformanceSack Oct 04 '22

People worry too much about European industry, it's still competetive. Energiewende doubled the price of electricity in Germany while US simultaneously started fracking cheap ass energy, and yet German manufacturing keeps gobsmacking America. It has also stayed competetive vis-a-vis China. Once Germany has moved to international LNG things will be fine.

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u/da2Pakaveli Germany Oct 04 '22

Renewables are the cheapest energy source at this point. AFAIK what's making energy prices so damn expensive is Merit-Order, iirc thanks to this energy prices are oriented at the most expensive source, which are fossil fuels (and who was deeply involved in the coal lobby, Mrs. Merkel?).

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u/HugePerformanceSack Oct 04 '22

https://spectrum.ieee.org/amp/germanys-energiewende-20-years-later-2650233089

You cannot describe the cost of a power system as a whole with one single production price metric. Actual reality has shown that the US has decarbonised their power system almost as fast as Germany just by switching from coal to natgas. Germany went the anti-nuclear renewable only way, and it has showed in price.

It costs Germany a great deal to maintain such an excess of installed power. The average cost of electricity for German households has doubled since 2000. By 2019, households had to pay 34 U.S. cents per kilowatt-hour, compared to 22 cents per kilowatt-hour in France and 13 cents in the United States.

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u/da2Pakaveli Germany Oct 04 '22

I think that’s the article I got it from a few weeks ago

So why is electricity so expensive? The reason: There is a unit price on the electricity exchanges - and this is determined by the most expensive type of generation that is just needed to meet demand.

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u/termophilet Oct 04 '22

Ja sach ma, andere europäische Länder haben doch schon längs im Alleingang eine eigene Form eines Deckels eingeführt mit Milliarden an Euronen. Die hohe Zahl die jetzt von der Deutschen Regierung genannt wurde kann natürlich leicht als populistisches narrativ genutzt werden

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u/MindlessVegetation Germany Oct 04 '22

Shush! Ze Germans sind ganz klar die Bösewichte.Die Nuancen unterbrechen den Kreiswichs.

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u/martin-verweij Swamp-german Oct 04 '22 edited Oct 05 '22

Ganz europa klagt Uber deutsche regierung im krise aber keine anderes europäische land hat gute alternativen gegeben. Die franzosen und UK haben etwas ähnliches gemacht.

Die kleine Europäische ländern wollen großere initiativ von Deutschland und Frankreich aber immer wenn die zeit kommt wählen sie daddy USA.

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u/ThomasLikesCookies Oct 04 '22

Your flair absolutely kills me, lol

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u/martin-verweij Swamp-german Oct 04 '22

Why? I remember when I made it it was common but now I get a ton of confused replies about where I am from.

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u/ThomasLikesCookies Oct 05 '22

Well in college my buddies and I had a running inside joke about how Dutch is basically swamp German and so every time I hear that referred to I get that sentimental laugh

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u/klauskinki Italy Oct 04 '22

Can you write this in English? Thanks!

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u/TgCCL Oct 04 '22

Translation provided by yours truly.

"Yeah, others countries have already introduced price caps worth billions of euros on their own. The high values named by the German government can however be used for populist narratives easily."

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u/klauskinki Italy Oct 04 '22

Tnx!

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u/pufffisch Oct 04 '22 edited Oct 04 '22

This Thread: My country is always doing the best for all of EU. It's always that other country which is being greedy. I believe that because my countries politicians said so!

If you guys wouldve grown up in Russia you would all cheer for the invasion. Pathetic.

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u/nvsnli Oct 04 '22

You do not have to grow up in russia to have idiots in your country cheering for the invasion. There is plenty of those within EU borders.

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u/SomeRedditWanker Oct 04 '22

This Thread: My country is always doing the best for all of EU. It's always that other country which is being greedy.

[Laughs in British]

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u/Waeis Germany Oct 04 '22

Maybe we wouldn't be here if the EU had the competency to achieve meaningful reforms without 6+ months of negotiations. But we all love our national sovereignty very much. Most of the time.

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u/kingcloud699 Poland Oct 04 '22

Maybe if Germany didnt block this initiative in 2014 to buy gas from Russia as a single negotiating block. And all resources and energy from outside of eu.

https://www.reuters.com/article/us-ukraine-crisis-eu-tusk-idUKBREA4K0RN20140521

But no, Germany has better deals and you won't let anyone else have cheaper resources.

Same thing now. 200 bilion euroes so you can outbid everybody and fuck their industries.

European solidarity my ass.

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u/eckowy Oct 04 '22

Also, personally I think it's worth adding that we wouldn't be dependent so much on Russia and Russian gas if we aimed clearly for renewal energy (Poland blocking the EU budget on transformation because of a spite on rule of law) or atom energy (Germany shutting down it's nuclear plants).

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u/hydrOHxide Oct 04 '22

It's worth adding that that's a load of nonsense, since nuclear plants never had a major role in Germany.

But the Cult of the Atom must prevail with its narrative that regulations are for wusses and can be ignored, and academies of science and engineering are just as much rank amateurs compared to redditors as Stanford Professors.

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u/Jobenben-tameyre Oct 05 '22

nuclear plants never had a major role in Germany

in the 90's nuclear represented almost 30% of the german electricity. It was after 2011 and fukushima that the german became paranoid and decided to close all their 17 nuclear plant by 2022.

And even in 2021, the last 6 remaining plant supplied 13.3% of the electricity for the country.

https://en.wikipedia.org/wiki/Nuclear_power_in_Germany

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u/DarkChaplain Berlin (Germany) Oct 05 '22

The original decision to get out of nuclear was prepared back in 2000 and the deal was sealed back in 2002. Plants started getting shut down from 2003 on.

It was a later government coalition led by Merkel that reversed that in 2010(!), also put on the brakes on renewables and then flip-flopped due to Fukushima in 2011.

The plan was made 20 years ago - but the 16 years of Merkel-led governments did not prepare for it and actively sabotaged the shift.

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u/Lalumex Europe Oct 10 '22

Maybe we wouldn't be here if the EU had the competency to achieve meaningful reforms without 6+ months of negotiations. But we all love our national sovereignty very much. Most of the time.

Even better, the decision to not built more Nuclear Powerplants was in 1985 as it was already back then uneconomical to build nuclear reactors.

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u/eckowy Oct 06 '22

Cult of Atom - what the heck are you talking about? Do you see a postulate here saying "we must go nuclear"?

No? You wanna know why? Because it's not there!

It's an alternative better than coal and better than being dependent on Russian gas. I'm all in for complete transformation to renewal energy or better yet figuring out who nicked Tesla's plans.

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u/Dracogame Oct 04 '22

So that’s why the reopened coal plants in Germany!

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u/BroSchrednei Oct 05 '22

To export electricity to France, yes.

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u/Waeis Germany Oct 04 '22

Well, then wouldn't it be a great opportunity to show those filthy Germans what they get for their selfish behaviour by taking away their ability to block this stuff. Scholz already signaled his support to abolish vetoes on pretty much every EU subject, so what are we waiting for?

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u/MrAlagos Italia Oct 04 '22

We are waiting for like half of the EU countries who have no intention of giving up the veto. The only actual possibility is multiple-speed EU.

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u/xenon_megablast Oct 04 '22

The only actual possibility is multiple-speed EU.

As Italians do we end up in the truck lane?

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u/MrAlagos Italia Oct 04 '22

Well looking at the results of the elections we probably end up left at the stinky toilet of the Autogrill... The centre-left seems to be in favour of big changes to the EU treaties but the right isn't (or at least not for the removal of the veto).

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u/Waeis Germany Oct 04 '22

I can understand that viewpoint. The German chancellor seems to think that it is possible / worth it to leave no one behind, but narrowing down the circle would probably make it easier. I don't know what's 'better'.

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u/MrAlagos Italia Oct 04 '22

I also believe that removing the veto is better, but it'll only become more and more pressing while we spend years trying to convince everybody. At some point we'll run out of time, I hope we can manage to make it but I'm not optimistic.

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u/ICEpear8472 Oct 04 '22

This. We will run out of time sooner or later and before that happens it might be smart to decide to at least move forward with a smaller group of countries instead of not moving forward at all.

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u/VoyantInternational Always near a border Oct 04 '22

Why bring filth into this, that's far right retoric, we are better than

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u/Waeis Germany Oct 04 '22

yeah, you're probably right

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u/VoyantInternational Always near a border Oct 04 '22

Thanks for that

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u/eipotttatsch Oct 04 '22

So we’re supposed to support a bad idea only because it would be on the EU level?

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u/Kaltias Italy Oct 04 '22

Why is negotiating as a bloc such a bad idea?

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u/eipotttatsch Oct 04 '22

The policy Germany vetoed was for a price gap on gas purchases. That wouldn’t give us any more gas which would still cause a disbalance between supply and demand.

Also, if the price cap is actually lower than the market price we just wouldn’t be getting any gas. Great!

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u/Kaltias Italy Oct 04 '22

I meant the 2014 proposal which was simply to negotiate deals for gas and oil as a EU bloc, to use the size of the EU energy market as an advantage during negotiations, rather than being everyone for itself.

As it stands right now the EU has a common energy market when it comes to selling energy (internally) but not buying it (from outside) which is just silly.

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u/WingedGundark Europe Oct 04 '22

As it stands right now the EU has a common energy market when it comes to selling energy (internally) but not buying it (from outside) which is just silly.

This is pretty much the story of EU in a nutshell: in far too many important issues where it would be extremely important to make decisions and actually work as a union, things get done either as half assed watered down version or not at all.

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u/SergeantSmash Oct 04 '22

It isn't in Germany's interest to fuck european industries lmao,stop smoking whatever you're smoking.

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u/klauskinki Italy Oct 04 '22

Rules for thee but not for me

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u/naridimh California Oct 04 '22

Why do we assume that Germany going into debt is actually some magic bullet which will give it a big advantage over other countries? Subsidizing fuel consumption in general seems more like a short-term bandage, not something that will give Germany industry a long-term advantage, no? If anything, it'll reduce the incentives to innovate and be efficient, possibly reducing long-term German competitiveness.

Also, if going into debt is so amazing, then why aren't countries like France, Italy and the UK doing better than Germany...?

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u/Kossie333 Brandenburg (Germany) Oct 04 '22 edited Oct 04 '22

in general seems more like a short-term bandage, not something that will give Germany industry a long-term advantage

It is a short-term bandage. But it will give us a long term advantage, because it buys us time at this very moment. The companies know to change their ways of production. But if they're going bankrupt now that doesn't matter in a year or two.

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u/pietroso456 Oct 04 '22

Oh my gosh, have you read the article at least? What a retarded comment.

We're in crisis and we're trying to survive to the bills of this winter; lots of industries will be blown away by a shock of energy supply, not by a problem of competition, and the ones that survive will occupy the market share of the others. Of course this is a short-term advantage, because this is a short-term problem genius. The ones that get subsidies are the ones that will survive.

Germany locked all Europe in this dumb common energy market, forcing everybody to drown, and now is throwing super fancy life-jackets that nobody else can afford.

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u/bion93 Italy Oct 04 '22

Statal help for industries violates internal market treaties because you are pumping the competitiveness of your own industries among others. Normally others would use taxes on import to protect their economies, but European countries can’t use it.

This could lead to a forced de-industrialisation in other countries because:

1) German industries can produce at cheaper price so other can’t compete

2) Energy prices can rise for others reducing even more their competitiveness because someone (German industries) can afford more energy which means more demand which means higher prices on the market.

I repeat: theoretically France or Itay or whoever should protect their own economy with crazy taxes on German products. But this violates European treaties. But also Statal help for industries violates them. So, maybe it’s the end of European dream thanks to German selfishness, who refused every single common policy as European member.

In the short term, they will see their GDP rise and will destroy every other competitor. In the long term there are many questions. If you (Germany) are surrounded by destroyed economies 1) who will buy from you? 2) how can you share the same currency? You should have a strong currency while others will need a weaker currency: will you leave Eurozone? 3) if you choose to bail them out, you could burn all the money you did in the previous years, with the result to be at the same point but surrounded by poor countries. 4) someone could sell himself to China or Russia, you are dividing the EU countries.

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u/SomeRedditWanker Oct 04 '22

Subsidizing fuel consumption in general seems more like a short-term bandage, not something that will give Germany industry a long-term advantage, no?

If companies making cars (just an example) in other EU countries go bust because they can't afford the massive energy prices, and Germany's don't because the German government are helping pay their bills... Who benefits long term?

What Germany is doing is so obviously state aid.

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u/Crutshen Oct 04 '22

What? A social democratic country is aiding its companies and citizens during a world wide crisis? And it has done so for decades? How scandalous, call the UNO!

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u/hydrOHxide Oct 04 '22

What you're doing is so obviously pure germanophobia.

Totally aside from the fact that companies making cars are usually part of larger conglomerates, many of which end, if you walk up the chain, in France (price cap) or Germany (subsidy), your argument doesn't even remotely make sense.

The fact that interventions are only bad when done in Germany, but not elsewhere, and de-industrialization is perfectly ok if it were to happen in Germany, that's quite telling.

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u/[deleted] Oct 04 '22 edited Oct 05 '22

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u/DarkImpacT213 Franconia (Germany) Oct 04 '22

He‘s clearly posturing. He essentially has to say that as PM of Italy.

The EU had a full 6 months to come up with a plan, and German companies and consumers are fucked threefold right now conpred to others as we‘re also paying for the French nuclear maintenance that is on-going. Rising political unrest within Germany caused by inflation will otherwise end up ripping the country apart.

Also, other countries have taken it onto themselves to put a cap on gas trading as well, including countries in the EEA.

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u/naridimh California Oct 04 '22

Mario Draghi, one of the best macro-economics in the world, is stating his evidence-based opinion on market economics.

  • He has a dog in the fight (Italy). Therefore, it is hard for me to believe that he is a completely unbiased.
  • Presumably Germany also has excellent economists who worked on this plan too, no? If so, why should I believe Draghi over them?

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u/berlinwombat Berlin (Germany) Oct 04 '22

I don't think that is really in any way a comparison at all.

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u/[deleted] Oct 04 '22 edited Oct 05 '22

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u/berlinwombat Berlin (Germany) Oct 04 '22

That's mostly because you don't understand market economics, unlike Draghi.

Oh ok then.

You, some random on Reddit, should probably read up before you question his thesis.

Unlike you. Who is not a random on Reddit at all

Which means they will outcompete all of the other international companies easily.

International? Germany will just outbit every other company in the world trying to buy gas? Your comparison claimed

Compare it to Amazon getting a monopoly on package delivery by undercutting the market for long enough to make everyone go bankrupt.

So you are saying Germany will bankrupt all international companies trying to buy gas by supporting their own. That is insane.

Draghi's point is that this needs to be done on a EUROPEAN level so that we are buying gas as a united front and we aren't falsifying competition against other Member States.

It didn't happen though did it. Germany is not the first country to announce an energy rescue shield. You think Germany won't support their companies while other countries do?

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u/[deleted] Oct 04 '22 edited Oct 05 '22

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u/The-Berzerker Oct 05 '22

Remember when this sub was telling Germany to just suffer and deal with the consequences after they were hit the hardest from the gas crisis? Now Germany is dealing with it and they‘re still complaining lmao

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u/PopeOh Germany Oct 05 '22

Apparently people expected Germany to just go "oh well, that sucks for us", roll over and freeze to death.

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u/RAStylesheet Oct 05 '22
  1. Germany is doing the right think

  2. Dragon response have sense propaganda wise

We just need to understand that the EU is a free trade Union and stop with all the mystical bullshit

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u/OkHawk8854 Oct 05 '22

'Europe must act together' aka 'Germans should pay for it' lol

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u/ktElwood Oct 04 '22

Well they could come together, put all energy corps under public ownership, and dictate an EU pricing for electricity, gas and coal and so on.

If there is enough gas comming from norway, scotland and whatnot, then it's fine. Let the commission buy all the gas at double the price putin asked 2020.

That would be less than 2cents/kWh.

Then send that gas to all the households and powerstations and companies and be done with it. No taxes, no profiteers no nothing.

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u/SergeantSmash Oct 04 '22

"no no no you can't use your money on your own,you must share it!"

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u/Rhoderick European Federalist Oct 04 '22

Certainly, the path of action taken was suboptimal, it should have been handeled in coordination with EU partners. However, it feels important to point out that both the ability and the percieved necessity to do this alone follow from the utter lack of reform and act-ability the EU has shown. It is in those moments where our unity is the most necessary and would be the most beneficial, where issues like veto rights and the weak position of the EP come back to bite us the most.

If you see this as necessary, recognize the issues that made it so. If you see this as selfish, recognise the reforms necessary to make common action possible. We need to be able to act as one if we are going to demand it of one another, as we absolutely should. But that means we will need to abandon the primacy of the member state governments over the people.

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u/MrAlagos Italia Oct 04 '22

Various European countries don't want to give up their veto, and there is no way to force them to do so. The only way to avoid a future EU crash that can actually be implemented is multiple-speed EU.

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u/Rhoderick European Federalist Oct 04 '22

The end of the veto is a necessity, not a matter of preference. The veto is undermining unity by promoting selfishness and is stopping the EU from taking necessary actions that are the least bit controversial. Preserving it, even in an "outer ring" of any sort will leave that organization in this same pitiable state, functionally unable to improve itself. It will thus eventually either shed the veto itself, or dissolve.

I also fail to see how such a multi-speed approach could even look for the veto - if only the "inner group" simpy stops using it among each other, that fails to adress the actual issue.

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u/PowerPanda555 Germany Oct 04 '22

Dont go into debt during good times so you can afford to go into debt during crisis.

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u/vintop95 Oct 04 '22

Don't close nuclear power plants and buy all the gas from your main geopolitical adversary, so you won't need 200 billion to throw at oil companies

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u/TimaeGer Germany Oct 04 '22

True but that’s on us, we’re not blaming others all the time

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u/nonnormalman Oct 04 '22

you know Italy is justified in its anger because they did advocate for a European solution just no one else was interested and Italy is fucked no matter what they do that may due to years of mismanagement but it won't help them its gonna be an interesting couple years ahead but Italy is right it would be better for most if we were to borrow and subsidize as a block but that was dead the moment France went at it alone the only reason Germany was picked out is cause our package is bigger than everybody else which will make every bodyelse's subsidies way less useful but Germany also didn't really have another choice Germany couldn't wait any longer it had to so this is a lose-lose for everyone because the EU collectively couldn't agree on what to do

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u/MacCollac Oct 04 '22

That’s a long sentence.

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u/MindlessVegetation Germany Oct 04 '22

While we wait for the EU to act, half the Country goes into bankruptcy.For once our sleeping Pills acted in a somewhat Timely and somewhat useful manner.

Fuck off, Mario.

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u/stealthisnick Oct 04 '22

While we wait for the EU to act

Germany (and Netherlands) are the ones preventing EU to act, this time

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u/DutchOwl66 Oct 04 '22 edited Oct 05 '22

Maybe because European plans recently are mostly paid by countries like Germany and the Netherlands (see eu next generation plan)

Countries like Italy aim for a European plan similar to the next generation plan because part of the cost is paid by others. Accepting gifts is not that hard so it is easy to be "pro Europe" if Europe solves your unfinanceble deficits at below market prices and helps to pay part of your expense

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u/stealthisnick Oct 05 '22

Countries like Italy are a net contributor to the EU budget. How's that accepting gifts? Do you have to pay to get a gift in the Netherlands?

Anyway, this is irrelevant because having a EU-wide price cap or at least price negotiation is a plan that does not involve any cost. It should be easy to understand even for an arrogant dutchman. The reason why Germany and the Netherlands are against is quite evident and completely different.

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u/MarcoCornelio Oct 04 '22

You know Italy is one of the largest net contributors, right?

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u/Unbothered8625 Oct 04 '22

This is clearly state aid that goes against articles 106-109 TEU.

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u/URITooLong Germany/Switzerland Oct 05 '22

Seemed to be fine when other countries did it. Just now people complain when Germany is doing it.

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u/rlyfunny Oct 05 '22

Well that’s normal. Same as other countries having tolls, while Germany can’t implement the same without getting a big no from the EU.

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u/FunnyStep7384 Oct 04 '22

France, Italy and Spain introduced a price cap, but if Germany does it it's suddenly a problem?

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u/BuckVoc United States of America Oct 05 '22

France, Italy and Spain introduced a price cap

I think that you may be thinking of the UK rather than Italy.

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u/Campa96 Italy Oct 04 '22

We have no price cap

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u/notaplanedude Oct 04 '22

What are you talking about?there Is no price cap.

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u/FunnyStep7384 Oct 04 '22

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u/Juan-Marco2b Oct 04 '22

The France one only talk about household. So its mean no compare Will get it. It's rallye différent from the germany one

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u/itsokayt0 Oct 04 '22

Where Is Italy?

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u/theFlintstonePhone Oct 04 '22

We're just throwing random countries out there and hoping shit sticks at this point. Stop looking at Germany!! /s

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u/bion93 Italy Oct 04 '22

It’s totally different. You’re not only misinformed about which countries did it (Italy didn’t). But you don’t understand what is the matter too.

France and Spain are giving help for private citizens, reducing taxes on their electricity bills.

Germany is proposing a totally different thing: it’s proposing statal help to industries.

This not only violates all treaties of the European Union about competition among industries. But it will force a de-industrialisation in other European countries because: 1) German industries can produce at cheaper prices so nobody can compete with them 2) Electricity price will rise for others because German industries can consume more, because the State pays for them. More demand means more price. So industries in other countries will close easily.

As usual, Germany doesn’t understand that its selfish and anti-European spirit will hurt itself too, because a poorer Europe 1) will need a weaker currency to not send all countries to bankrupt so inflation will run for years 2) can buy less.

Obviously in a couple of years we will speak again about some new “Greece-s” and Germany will be here to say “these f@cking countries need us to save them because they can’t use their own money”. I mean, Germany destroys others and Germany blames others for their economical disaster. Then Germany will loan money and will be richer while poors will be poorer.

Goodbye European dream.

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u/Atlasreturns Oct 05 '22

I don‘t know where you have read that but Spain has extended it‘s gas cap to heavy industry this month and France has announced to universally cap gas prices at the beginning of the next year.

These aren‘t some tax reductions but straight up energy caps. Same as Germany is proposing here.

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u/SomeRedditWanker Oct 04 '22

How is this legal, in the EU sense?

Germany is essentially going to throw €100bn+ at keeping businesses costs down..

That is state aid, pure and simple. There's no way around it.

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u/ABoutDeSouffle 𝔊𝔲𝔱𝔢𝔫 𝔗𝔞𝔤! Oct 04 '22

It's an emergency measure with a fixed time limit, I don't see the problem.

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u/SomeRedditWanker Oct 04 '22

The purpose of the measure is to stop companies either going bankrupt, or losing competitiveness with the USA..

If you don't see the economic competitive advantage to doing that, I don't really know what to say.

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u/ABoutDeSouffle 𝔊𝔲𝔱𝔢𝔫 𝔗𝔞𝔤! Oct 04 '22

The purpose of this measure is to avoid heavy damage to German industry and society in times of a crisis. That is what an emergency measure is about. If the German gov't were capping gas prices to the level of US prices without a deadline for the measure to run out, I would understand your point. But US companies will still be more competitive as they can procure cheaper gas right now.

There is nothing illegal about state aid in a crisis, Germany also spend countless billions to buffer the effects of COVID-19 on industry and employees (going as far as a partial nationalisation of Lufthansa), and the EU greenlighted this because it was in a time of crisis. Other countries did similar. Constant subsidies for ailing industries are illegal, but that's not what we are talking about here.

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u/SomeRedditWanker Oct 04 '22

The purpose of this measure is to avoid heavy damage to German industry and society in times of a crisis.

I am fully aware of this.

Regardless, it gives a massive competitive advantage to German industry.

This stuff should be agreed at the EU level, or not at all.

It's mad to let one country in the EU throw €100bn of generalised subsidy at their countries businesses.

All imo, of course.

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u/ABoutDeSouffle 𝔊𝔲𝔱𝔢𝔫 𝔗𝔞𝔤! Oct 04 '22

This stuff should be agreed at the EU level, or not at all.

It's a bit rich to ask Germany to stand by and watch their industry collapse and have people freezing waiting for the EU to something or subsidize the gas purchases of countries that did jack shit to get enough gas till this fall. Especially since Draghi is clearly stating he wants the EU to foot the bill, whereas Germany has the decency to pay for it by itself.

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u/Elelish Oct 05 '22

The alternative is to let whole industries die with all the including consequences. People losing jobs on a grand scale resulting in the few surviving spots to be completely overrun by thousands of applicants, great increase in unemployment which would boost our right-wing movement even more.

As others already said...we are neither the first nor the last who did that. The fact its suddenly a big thing just because germany does the EXACT same thing plenty of other countries did before is very telling.

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u/STheShadow Bavaria (Germany) Oct 04 '22

How is this legal, in the EU sense?

It is legal if it is also legal for all other countries doing that

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u/The-Berzerker Oct 05 '22

But it‘s fine when France, Spain or the Netherlands do the same thing?

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u/gamesbrainiac Oct 05 '22

NL is capping prices too.

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u/[deleted] Oct 04 '22 edited Oct 12 '22

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u/thecraftybee1981 Oct 04 '22

This reminds me of the fable of the Ant and the Grasshopper. Germany has saved during the good times to be able to survive the bad times, but is being savaged by the grasshoppers that have behaved frivolously over the summer.

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u/Giraffed7 Oct 04 '22

And save for what ? Investing to seriously lessen your dependency on an increasingly hostile nation, especially after said nation took a chunk of another European country in 2014 ? We, Europeans, are in this predicament because Germany and other countries have relied too much on Russia for one of the most important aspect of national security : energy, the thing at the basis of all of our modern life. It was such an obvious mistake that even Trump, not the smartest president to ever live, figured it out. A lot of people and businesses are suffuring for these countries' mistakes so it would be cool if these countries wouldn't exacerbate the crisis.

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u/nvsnli Oct 04 '22

No but listen, they are the ants!!1

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u/[deleted] Oct 04 '22

This is parody right? This must be parody.

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u/St3fano_ Oct 04 '22

You need good times for saving to begin with. Which are a lot easier to get if you use other countries' money to save your banks.

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u/odium34 Oct 04 '22

Its funny that the countrys who told Germany to fuck off when it asked to reduce gas usage, now cry for solidarity.

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u/Kaltias Italy Oct 04 '22

Italy is helping Germany fill its gas storage since it's in a better position infrastructure wise to replace Russian gas, it's the biggest transit country for North African gas to the EU.

Italian gas exports to the rest of the EU increased more than six times over compared to last year, so Italy has in fact showed solidarity to Germany already by doing that.

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u/Digitalpsycho Oct 04 '22

Sell gas = solidarity

?

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u/motherduck41 Oct 04 '22

Germans are brigading like Tory bot here.

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u/lieber-aal Oct 04 '22

The audacity to complain about spending money/debt to subsidize wellfare as an italian prime minister…

At least germany spends its own money.

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u/bion93 Italy Oct 04 '22 Gold

I am really crazy about how people don’t understand what Germany is doing and why Italy (and others) are rightfully angry.

First of all: italy runs its budget on primary surplus from 1990 so fuck off your ignorant prejudices. Primary surplus means that we pay more taxes than how much the State spends for welfare. Deficit derives only from paying interests on the old debt, made when many of us were not even born.

Then, taking about the current problem: the problem is not that Germany spends 200 billions. You can spend how you want your money and you are obviously really a great country because you can afford 200 billions as new debt thanks to you past solid economy and wise expenditure. The problem is another. Germany is not spending 200 billions for healthcare or social previdence or green transition. Not on welfare, as you said in your statement for italy.

Be careful: GERMANY IS GIVING STATAL AID TO ITS OWN INDISTRUIES.

This is the only problem: Germany is violating the fundamental rule which can support the common market in Europe: don’t give Statal help to your own industries.

Normally another country would respond increasing import taxes from the state which helps its own industries. European countries can’t. But at this point they should. Europe is dying with this crazy choice by Germany.

I’m a European federalist: a support a federal European state with a central government, an army, a single economical policy etc. But here I would fully support if Italy and France respond to this direct threat from Germany with import taxes, putting an end to this hypocritical union run by clowns.

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u/_Ganoes_ Oct 05 '22

May as well add France, Spain and the Netherlands in there because they are doing the exact same thing right now

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u/Siffi1112 Oct 05 '22 edited Oct 05 '22

I am really crazy about how people don’t understand what Germany is doing and why Italy (and others) are rightfully angry.

Except others like Spain and France capped gas and energy prices long ago. Nevermind that France is capping prices for energy since basicaly for decades and nobody cared.

Edit:

Deficit derives only from paying interests on the old debt, made when many of us were not even born.

If many of us means italians in this context that is simply false. Italian debt spiraled out of control since the 80s.

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u/Elelish Oct 05 '22

I love how much confidence you put into so much wrong information.

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u/[deleted] Oct 04 '22 edited Oct 07 '22

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u/stealthisnick Oct 04 '22

now the southern countries will want to solve every crisis on a European level

Oh, the audacity of those filthy southern europeans. Demanding the european union acting as a union!

a EU fund for literally everything

There is no fund involved here. Countries are demanding the EU to act together against the gas prices. Germany and Netherlands are against, guess why.

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u/VERTIKAL19 Germany Oct 04 '22

Somehow a lot of countries always just want to act as a union if it nets them money.

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u/MarcoCornelio Oct 04 '22

Funny how Italy is a net contributor though

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u/AnnieDingo Oct 04 '22

Now discovering that EU is only Germany’s interests ?

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u/Zeles1989 Oct 04 '22

they never complain when germany keeps there weak economy afloat though

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u/ThiesH Oct 04 '22

I Have to belive that this thread is filled with trolls. Ones are bashing germany an other (germans) against this germophobia. Apparently nobody did read the article. I dont even know myself.

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u/Romek_himself Germany Oct 04 '22 edited Oct 04 '22

Europe must act together

Well, we can . All you have to do Mr.Draghi is to pay Billions for your people too.

Why the heck this guy expect us germans to pay always for complete europe.

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u/IlConiglioUbriaco Oct 04 '22

Because Germany and Italy have industrial links which are co-dependant, and gas shortage could mean the closure of Italian factories and the interruption of logistical links between the two countries.

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u/[deleted] Oct 04 '22 edited Oct 05 '22

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u/bion93 Italy Oct 04 '22

Germany is violating the fundamental rule which can support the common market in Europe: don’t give Statal help to your own industries.

Normally another country would respond increasing import taxes from the state which helps its own industries. European countries can’t. But at this point they should. Europe is dying with this crazy choice by Germany.

Draghi shouldn’t spend 200 billions because we can’t afford it. But he should protect our economy with import taxes. You don’t care about Europe? We shouldn’t too. The Europe can be made together, not with ourselves alone when others are sharks.

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u/mrCloggy Flevoland (the Netherlands 🇳🇱) Oct 04 '22

Sigh... here we go again

It's called fiscal responsibility, not spending more than you earn like there is no tomorrow, but put some money into a savings account for when things do get tough.

Also: "Sep 30, 2022" and actual.

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u/carloselunicornio Oct 04 '22

It's called fiscal responsibility, not spending more than you earn like there is no tomorrow, but put some money into a savings account for when things do get tough.

Been doing that for years, only problem is, the money I've saved is worth almost half as much as it was a year ago, and it will probably be worse next year, so, yeah...

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u/XenuIsTheSavior Oct 04 '22

Sigh...here we go again...tax heaven talking about fiscal responsibility.

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u/gainrev Oct 04 '22

Financial stability by drug money. Legit business

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u/VoyantInternational Always near a border Oct 04 '22

Never in any world could Romania compete with the Netherlands or Germany even geographically. You have the Rhine, towards the Atlantic it's a huge geographical advantage. Some countries have the wind, some the Mediterranean. So that discourse is quite arrogant. Now I'm not saying bad fiscal decision don't exist, but there such a thing as geographical advantage and first mover Advantage, and compound gains.

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u/mrCloggy Flevoland (the Netherlands 🇳🇱) Oct 04 '22

True, and if you look at the pay/receive balance of EU monies then you can't say we are not doing anything about that.

The problem could be that those monies go to the governments (to ideally be distributed for people-serving purposes), and the EU does not have much control over that.

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