France announces €45bn effort to shield country from energy cost increases

theguardian.com:

The French government plans to spend €45bn shielding households and businesses from energy price shocks in a budget focused on bringing down inflation.

The finance minister, Bruno Le Maire, said the increase in the cost of gas and electricity would be capped at 15% from January. Gas and electricity price rises are currently capped at 4% until the end of the year in what is known as the bouclier tarifaire (tariff shield).

Outlining key elements of his 2023 budget bill on Monday, Le Maire said it was financed “down to the last euro” and the government’s No 1 priority was fighting inflation at a time of unprecedented uncertainty due to Russia’s war against Ukraine.

“The most important and the most urgent challenge for France and other European nations is to bring down the inflation pressure,” the minister told journalists on Monday. “We don’t want to increase taxes and we want to protect households,” he added.

Special levies on energy companies were expected to reduce the net cost to the country of the price cap from €45bn to €12bn. Le Maire said €3bn would be set aside to help French companies threatened by soaring energy prices particularly those “exposed to international competition”.

The French state is the majority shareholder in EDF, the country’s largest electricity supplier – it is engaged in taking full control of the company – and has a majority shareholding in Engie (formerly Gaz de France).

In an interview with Le Journal du Dimanche, the public accounts minister, Gabriel Attal, said the fuel price cap would “block the rise in gas and electricity bills at 15% instead of 120%”. Without this year’s 4% price cap, based on prices in November 2021 – three months before Russia’s invasion of Ukraine – the ministry estimated