Merkel hosts state premiers in talks on costly bid to phase out coal

Chancellor Angela Merkel is to host the premiers of Germany’s coal-producing states on Wednesday as negotiations heat up over compensation to offset her government’s bid to phase out coal by 2038.

Merkel and the state premiers of North Rhine Westphalia in western Germany, and Saxony-Anhalt, Saxony and Brandenburg in the east, are hoping to hammer out the details of how to restructure the country’s energy landscape as it transitions towards greener power, while supporting the regions that rely on coal for jobs.

“We will only succeed in achieving an ambitious coal phase-out if we take the citizens in the affected areas with us,” said North Rhine Westphalia premier Armin Laschet.

The government is under pressure from states in the former East Germany, where per capita gross domestic product has for years stagnated at around 70 per cent of that in the west, amid concerns that the policy shift could exacerbate economic inequality in the formerly divided country.

Decisions could be taken late Wednesday on a package of measures expected to amount to billions of euros.

The 2038 goal was set out in the final report of a government commission last year and Merkel’s new coalition has since agreed to implement the report’s recommendations.

The commission said more than 40 billion euros should be set aside to pay for the restructuring of the energy industry, predominantly for the affected regions.

Meanwhile, negotiations are also ongoing with energy firms over how much compensation they should get for closing their coal production – a figure also expected to run into the billions.

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