(Rewrites throughout after finance ministry comments, reaction
from chemicals sector)
BERLIN, May 5 (Reuters) - The German finance ministry
pushed back on Friday against the economy ministry's plan to
introduce a subsidised industrial power price, with a
spokesperson saying that the budget did not allow for it and
existing funds could not be redirected.
"There are no funds available for this project," the finance
ministry spokesperson said during a regular news conference,
shortly after the economy ministry released its plan for a
subsidised price of 6 cents per kilowatt hour (kWh) until 2030.
The use of funds from coffers initially created to boost
post-pandemic economic recovery - as foreseen by the economy
ministry - was "not constitutionally possible", the finance
ministry spokesperson said.
The proposed subsidy would be in place until 2030 and would
cost between 25 billion euros ($27.56 billion) and 30 billion
euros based on current market prices, according to the plan.
The economy ministry is led by Robert Habeck of the Greens.
Finance Minister Christian Lindner of the pro-business FDP
wrote in a guest article for business daily Handelsblatt on
Tuesday that such a subsidy would be "economically unwise", and
it would contradict market principles to rely on direct state
aid as a means to achieve industrial transformation.
Chancellor Olaf Scholz had also pushed back on the
initiative, saying that long-term subsidies were not beneficial
for the economy, and a government spokesperson said on Friday
that this stance had not changed.
Last year, Berlin introduced electricity and gas price caps
to shield industry and households from rising energy prices, but
companies in Germany say electricity prices are still too high
compared with other countries.
"This would be a clear game changer for our international
competitiveness," the VCI chemical association said of the
proposal.
"The industrial electricity price helps us to secure
production and industrial value creation and to master the
transformation to climate neutrality even better," it said in a
statement.
($1 = 0.9071 euros)
(Reporting by Markus Wacket and Friederike Heine, Editing by
Rachel More and Emelia Sithole-Matarise)
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