Germany's €200 billion energy aid package will provide limited help to businesses and is unlikely to dissuade companies from moving to cheaper production bases overseas, Reuters reports.

Last month, the German government unveiled its energy aid package, including lower gas prices and fuel sales tax cuts, to help households and small and medium-sized businesses (SMEs) cope with rising prices.

The proposed energy aid package won't change anything on the agenda yet. We still need to find alternatives, Mads Ryder, CEO of the Bavarian porcelain manufacturer Rosenthal, told Reuters.

The company, founded in Germany 143 years ago, is considering moving some of its production outside Germany to cut costs, and Ryder said the bailout plan is still too vague to convince him to reconsider his plans.

This week, the German government is expected to unveil details of the bailout package, which is scheduled to run through the spring of 2024.

High labor and other costs in Germany are forcing many companies to move parts or all of their business to cheaper locations in emerging European economies, or to think about doing so.

Lars Feld, an economic adviser to German Finance Minister Christian Lindner, said the energy crisis has forced these kinds of decisions.

The industry, thinking about moving, will now wait to see how the energy price brake will work. That's an important psychological impetus. But we can't go back to the energy prices we had before the Ukrainian war, Feld said.

With energy bills in Germany 10 times higher than they were paying two years ago, one in five engineering firms have realized the risk of moving at least some of their business overseas, a survey conducted by the German union IG Metall last month showed.

High energy prices have helped push consumer inflation in Germany to 10.9 percent in September, the highest level in more than a quarter century, which in turn is putting pressure on wages by increasing labor costs.

Industry bodies initially welcomed the energy reduction package, which also includes a temporary reduction in electricity prices to subsidize basic consumption for consumers and SMEs, and some companies are optimistic.

The German Association of Small and Medium-Sized Enterprises said it sees no concrete signs of increased outsourcing of manufacturing overseas as the energy price crisis affects all European countries.

A Deutsche Bank study found that German manufacturing is down 2.5 percent this year and 5 percent in 2023 because of rising energy prices.

Germany's large industrial companies may move production elsewhere depending on costs and customers, but small and medium-sized firms, the backbone of German industry, will be hit harder by the crisis.