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Germany to introduce €49 travel ticket, one-off gas payment

November 2, 2022

Federal and state leaders have approved the implementation of a €49 travel ticket and price brakes on gas and electricity, to help ease the burden on consumers.

Image: Kirchner-Media/imago images

Leaders of Germany's federal government and 16 states on Wednesday managed to agree on a number of key measures aimed at easing financial pressure on consumers.

"The source for these consequences and great challenges is (Russian President Vladimir) Putin's war," German Chancellor Olaf Scholz said at a press conference. 

Among the agreements was the introduction of a €49 monthly transport ticket that would enable travelers to use short-and-medium-distance public transportation nationwide at a lower cost.

The scheme is the successor of Germany's €9 ticket system that was implemented in the summer months of this year. The ultra-cheap monthly pass gave people access to regional train, metro and bus services across Germany.

German ministers were planning an "introductory phase" for the system, meaning that its price for consumers would later rise.

There had been disagreement for weeks about the financing of the €9 successor. Transport Minister Volker Wissing declared that the "way is now clear for the biggest public transport tariff reform in Germany."

Wissing said the ticket will come as soon as possible, while German News Agency DPA reported it would be introduced in the coming year, citing government sources.

Consensus on gas and electricity price brakes

Federal and state leaders were also meeting to decide on energy relief measures to help overburdened households manage as the winter months approach, and it was decided price brakes would be placed on the cost of gas and electricity.

German Chancellor Olaf Scholz said that gas prices would be capped at twelve cents per kilowatt hour, while electricity would be capped at 40 cents.

According to the plan in terms of the gas cap, 25,000 larger businesses and nearly 2,000 hospitals and schools would benefit as soon as January 1 next year.

Households and smaller firms may have to wait until March for the price brake to come into effect.

The measures will be implemented along with regulations that will see taxes on so-called windfall profits at electricity producers benefiting from the current market instability.

Another measure that has also been agreed upon is a one-off payment for gas bills in December for households and small businesses.

Germany's €200 billion energy relief plan: How fair is it?

Cost of housing allowance to be shared

After a lengthy dispute over who should shoulder costs, it was decided that federal government and states would share the tab for planned reforms of the housing allowance for low-income earners.

Federal Minister for Housing Klara Geywitz welcomed the agreement. "The support in coping with these costs will be able to give many people security," Geywitz said.

The state rent subsidy would be increased by an average of €190  a month and would be paid to 1.4 million more people than before, coming in at a cost of €5.1 billion ($5 billion).

A hardship fund would be set up for hospitals, nursing homes and social insitutions and some companies that would not manage without some form of relief. An amount of €12 billion would be provided for health care and social institutions.

The conundrum of who would foot the bill of accommodating and providing care for refugees was also settled. The federal government said it would give states an additional €1.5 billion this year and next year to help with refugees from Ukraine.

Germany's €200 billion energy relief plan: How fair is it?

kb,fb/es (dpa, AFP)

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