The Union and the SPD have removed large chunks in the budget talks. But an unresolved point is causing anger in the Union. The conflict could be dangerous for the Chancellor and the coalition.
Berlin. Despite failure at the first attempt, the Union is not giving up on reducing electricity taxes for everyone. She hopes to get the more than five billion euros for the implementation of the project from the coalition agreement by January 1, 2027 at the coalition committee next Tuesday at the latest. For Chancellor Friedrich Merz (CDU) it is about his credibility, for the German economy it is an important symbol and for citizens it is about compensation for the high energy prices - even if it is only a few euros.
The coalition partners were unable to agree on counter-financing in their budget negotiations on Wednesday. However, the group leaders reached agreements on a few other issues. The sugar tax on heavily sweetened drinks will not come until January 1, 2028, instead of July 1, 2027 as previously planned. An agreed new tax on plastic packaging will not be levied next year. And the increase in the sparkling wine tax is off the table.
SPD parliamentary group leader Matthias Miersch said afterwards with some satisfaction that “big chunks” had been clarified. In particular, he highlighted that cuts in social benefits for families had been dropped. In the Union, however, frustration over the result erupted in a group meeting that lasted more than three hours in the evening. There were a number of angry requests to speak, and there was talk of “disaster”. It “really banged”.
Many in the Union feel ripped off by Finance Minister Lars Klingbeil (SPD). General Secretary Franziska Hoppermann attacked him head-on. “The finance minister is creative when it comes to inventing taxes. But he ducks when it comes to concrete relief for everyone,” she told “Bild”. "Lars Klingbeil promised to reduce the electricity tax in the coalition agreement. Now the question is: What is this word still worth?"
The Chancellor was not at the parliamentary group's anger meeting on his 71st birthday, but was at a meal with his wife and daughter that had been planned for days. For him, the question is about a lot. After the state elections in September, which were humiliating for the Chancellor's party, the CDU leadership had decided to finally implement the electricity tax cut promised in the coalition agreement for everyone. To show voters who have drifted towards the AfD that the unpopular government in Berlin is also doing something for them.
“We not only want to provide relief, but we also want to close the credibility gap that this decision left for all of us last year,” said the Chancellor after a memorable meeting of the CDU executive board in mid-October.
Now nothing has come of it. Not only the Union faction, but also the CDU prime ministers are foaming at the mouth. The chance that a breakthrough will occur is considered slim. The budget committee met in the afternoon for the so-called adjustment meeting, which dealt with changes to the government's draft budget. It is expected to last until early Friday morning.
There will almost certainly be no agreement on electricity tax here. Then the bosses have to do it again themselves. In the coalition committee next Tuesday. If a compromise is successful there, it can still be introduced as an amendment to the final budget discussions in the Bundestag from November 24th to 27th.
The electricity tax in Germany is currently 2.05 cents per kilowatt hour - the CDU, CSU and SPD had already announced in the coalition agreement that they would reduce it for everyone to the EU minimum of 0.1 cents per kilowatt hour. However, with reference to budgetary constraints, this was only implemented for the manufacturing sector and agriculture and forestry. 5.4 billion euros are needed to extend it to all companies and citizens.
Where can the money come from? These options are being discussed:
Reducing subsidies - but that would trigger resistance from powerful lobby groups.
Use of billions in surpluses in the so-called EEG account to promote renewable energies, but there are legal concerns here.
Cuts in funding programs in the Climate and Transformation Fund, but that could be difficult to convey.
The CSU is giving up its pet tax policy project: expanding mothers' pensions.
But how big is the relief effect of the electricity tax cut for citizens and companies? The relief for citizens per month is manageable. According to calculations by the comparison portal Verivox, for a three-person household with an annual consumption of 4,000 kilowatt hours (kWh), it would bring a monthly relief of 7.75 euros.
For the business associations, the topic has a high symbolic value and is a question of trust in politics. DIHK President Peter Adrian said after the preliminary failure: “The zigzag course of new promises and backtracking is shaking trust in the federal government.”
