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Germany Unveils Short-Term Industry Package With Cheap Power, Ticket-Tax Cut and Deutschlandfonds

EU approval hurdles plus pension dissent threaten to overshadow a unity push.

Overview

  • Leaders announced a subsidised industrial electricity price targeting about €0.05 per kWh for energy‑intensive firms from 2026 to 2028, with federal costs estimated at €3–5 billion and still subject to EU discussions.
  • The government will roll back the air‑traffic ticket tax to its pre‑May 2024 level on 1 July 2026, a move expected to forgo roughly €350 million in revenue.
  • Plans for new controllable power capacity were pared to about 10 GW—around 8 GW of gas plants and 2 GW open to batteries or storage—with tenders slated for next year and EU sign‑off required for state support before plants enter service by 2031.
  • A new Deutschlandfonds will be set up via KfW instruments to mobilise private capital for strategic investments such as energy infrastructure and start‑ups, though detailed funding figures were not provided.
  • While coalition leaders staged a show of unity, economists criticised the measures as short‑term bridging steps rather than structural reform, and a bloc of about 18 younger Union MPs is refusing to back the current pension bill.