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ENERGY

Gas bills in Germany will remain high despite price cap, warns economist

Germany is planning to bring in a cap on the price of gas for consumers. But a leading economist has warned that energy prices will still remain high. What can we expect?

Published: 7 October 2022 10:23 CEST
A woman warms up with tea and a blanket in a German flat.
A woman warms up with tea and a blanket in a German flat. Photo: picture alliance / dpa | Ole Spata

The German government last week announced a €200 billion relief package to help support private households and companies with spiralling energy prices. 

As part of the plans, a gas price cap is set to come into force in Germany, limiting the amount that people pay to use gas amid rocketing prices. 

The details on how it will work are still being thrashed out. But chairwoman of the gas price commission, Veronika Grimm, has dampened expectations for how big an effect the cap will have on energy bills. 

“We will permanently end our dependence on Russia,” the economics professor at the University of Erlangen-Nuremberg told the newspapers of the Funke Mediengruppe.

“So the gas price will remain significantly higher than before the Russian invasion of Ukraine due to higher liquid gas procurement prices – despite a gas price cap.” 

Grim suggested that the gas price cap could be in the form of a one-time payment to encourage people to continue using less gas. 

“It will be important to maintain a high savings incentive,” she said. “With a one-time payment, that would clearly be the case.

“You would have a much lower incentive to save if you lowered the price of gas by a certain percentage.”

On Thursday the Federal Network Agency warned that people in Germany are using too much gas.

“Gas consumption rose too sharply last week,” said Klaus Müller, head of the agency. 

He said gas usage among households and small firms was nearly 10 percent higher last week than the average consumption for the years 2018 to 2021.

“The situation could become very serious if we do not significantly reduce our gas consumption,” said Müller.

Meanwhile, economist Grimm slammed the time pressure that the gas price commission panel was under. The commission is to present proposal to policymakers on how a gas price brake could work in the coming days. 

“The decision to convene such a body could have been made a few months ago; after all, the development in gas prices was foreseeable,” Grimm said.

READ ALSO: German households see record hikes in heating costs 

Vocabulary 

One-time payment – (die) Einmalzahlung

Gas price cap/brake – (die) Gaspreisbremse

Significantly higher – deutlich höher 

Foreseeable – absehbar

We’re aiming to help our readers improve their German by translating vocabulary from some of our news stories. Did you find this article useful? Let us know.

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INHERITANCE

EXPLAINED: How to write a will in Germany

German succession law is pretty clear on what happens to your assets if you die without a will. But there are some big advantages - particularly for foreigners - of writing one.

Published: 26 April 2024 10:19 CEST
EXPLAINED: How to write a will in Germany

First and foremost, the largest advantage when it comes to writing wills as a foreigner in Germany – is the option to decide which country’s law applies when you write your will.

“Foreigners living in Germany have a huge advantage over German citizens, because you can choose the law of your own country for your will – even if you live in Germany,” says Andreas Moser, a Chemnitz-based immigration and family lawyer who runs a popular blog on German citizenship and family law. “Dual citizens who are German and have another nationality also have this advantage.”

READ ALSO: Everything you need to know about German inheritance law

Whether you want to do this of course, depends highly on the other country concerned and its law – and how much it differs from German law.

In specific detailed cases, you may want to consult a lawyer who specialises in wills and estates. One example of how German law may differ though is that many countries don’t have “forced heirship”, which requires you to leave certain shares of your estate to certain immediate family members.

By contrast, Germany has forced heirship. If, however, you would like to get around this for some reason, you can specify that your will should go under the other country’s law – if, for example, that country doesn’t have forced heirship.

This is unlikely, however, to result in people resident in Germany you leave assets to being able to get around inheritance tax, as this counts towards the receiver’s tax and not the deceased’s. However, there are other cases when using either country’s estate law might have different implications for certain assets – something a specialised lawyer can give you more information about.

If you want your other country’s rule to apply, make sure you specifically state that in your will.

EXPLAINED: The rules around inheritance tax in Germany

When should you definitely have a will?

Moser suggests that foreigners in Germany who want their native country’s law to apply write a will and specifically state that as their wish.

He also recommends wills in particular for those who have “patchwork” families, where one or both spouses have been married before or have children from previous marriages – in order to avoid complicated proceedings over who gets what.

A family sit at a lake.

Foreigners in Germany – even if they are dual German citizens – can choose the succession law they want to apply in their will. Image by Eva Mospanova from Pixabay

How should I write a will?

When it comes to composing a will, you have three main options:

The first is to write an international will that’s valid in your home country and that specifically states that you want the law of your home country to apply. 

The disadvantage of this approach is that your heirs may have to later pay to have it translated into German. You can also arrange to have an official German translation of it done.

Your second choice is to handwrite a will and sign it. This is known as a holograph will or Eigenhändiges Testament in German. It can be in any language, although again – your heirs may have to pay to have it translated later.

This option also avoids certain expensive legal fees – and you can state which country’s law you want to apply. However, for it to be valid, it must be entirely handwritten and include the date and place of signature. It cannot be typed and signed. If you’re concerned about the will going missing, you can deposit it with your responsible probate court for a fee of €75.

The final option is to write a public testament – which is prepared by a German notary. These wills are pretty ironclad but can be expensive – with fees that differ depending on the size of the estate. Once prepared, the notary will then file it with the public registry – so there is always a record of it.

READ ALSO: Do foreigners in Germany owe tax on money that is inherited from overseas?

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