BERLIN, Oct 10 (Reuters) – Germany’s 200 billion euro ($197 billion) energy aid package will provide limited relief for businesses and is unlikely to dissuade companies that are already looking to relocate to cheaper manufacturing bases overseas.
The German government set out its energy relief package last month, including a gas price brake and a cut in sales tax for the fuel to help households and small and medium-sized business (SMEs) cope with surging prices.
“The proposed energy relief package will not change anything on the agenda for the time being. We still have to find alternatives,” Mads Ryder, chief executive of Bavaria-based porcelain manufacturer Rosenthal, told Reuters.
The company, established in Germany 143 years ago, has been looking into relocating some of its production out of Germany to cut costs and Ryder said the gas brake plan was still too vague to convince Rosenthal to reconsider its plans.
This week the German government is due to unveil details of the gas brake and other aspects of the relief package, which is due to run until spring 2024.
High labour and other costs in Germany have been driving many companies to relocate parts or all of their business to cheaper locations in emerging European economies and elsewhere or to think about doing so.
Lars Feld, an economic adviser to the German finance minister Christian Lindner, said the energy crisis – which has seen gas prices soar following a collapse in Russian gas supplies to Europe since Russia’s invasion of Ukraine – was bringing those sorts of decisions to a head.
