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PRAGUE (Reuters) – France and Germany on Monday pledged to work together to protect households and businesses from rising energy prices.
French Finance Minister Bruno Le Maire and German Finance Minister Christian Lindner showed solidarity at the beginning of a meeting with euro zone finance ministers in Prague, telling reporters they would cooperate on policy.read more
“It’s a signal that France and Germany are going to start this talk together. It’s a signal that they’re standing shoulder to shoulder, not only here, but also on policy,” Lindner said.
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The pledge came a day after the European Central Bank (ECB) raised key interest rates by an unprecedented 75 basis points and promised more.read more
“I also have to fulfill my responsibilities as finance minister,” Lindner said. “The ECB is sending a strong signal to fight inflation.
“We protect our homes from the impact of high prices. We must do the same for private companies hit by high gas and electricity prices,” Lemaire said.
France, Germany and other countries have announced multi-billion euro packages to help businesses and consumers cope with surging inflation. Bruegel’s think tank estimates that EU government support has already reached €282 billion ($285 billion) for him, with more to come.read more
But the support itself could fuel inflation and create a vicious circle. Eurozone finance ministers are expected to discuss ways to adjust policies to prevent this.
Estonia’s Finance Minister Kate Pentus-Rosimannus said: “It’s a difficult debate, but I’m sure we’ll find the common solutions we need.”
In Brussels, EU energy ministers also met on Friday, adding that power companies face a price cap on Russia’s gas, a windfall tax on non-gas power plants, a sharp decline in block-power demand and a surge in collateral requirements. Emergency Loan Facility forread more
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Reporting by Jan Strupczewski Editing by Mark Potter
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