coalition
Traffic light representatives question the budget agreement
Federal Chancellor Olaf Scholz, Robert Habeck, Federal Minister for Economic Affairs and Climate Protection, and Christian Lindner, Federal Minister of Finance. photo
© Christoph Soeder/dpa
The Federal Constitutional Court’s budget ruling has pulled the rug out from under the traffic light coalition’s feet. After long negotiations, a kind of compromise was reached – with plenty of unanswered questions. But how much support does the deal actually enjoy?
Last Wednesday, Chancellor Olaf Scholz (SPD), Federal Economics Minister Robert Habeck (Greens) and Finance Minister Christian Lindner (FDP) agreed on how billions in holes in the federal budget for 2024 and in the climate and transformation fund should be plugged following a ruling by the Federal Constitutional Court.
Habeck warned against canceling the compromise. “If individual struts are now pulled out without inserting new ones, the overall solution collapses. This means that anyone who wants changes in one place must offer coordinated counter-financing that is viable for all sides,” he told the German Press Agency. The government could not afford not to give an answer; the budget had to be made.
In fact, the “struts” are already being tugged at diligently. SPD parliamentary group deputy Dirk Wiese would like to reopen and renegotiate the coalition leaders’ budget compromise in the Bundestag deliberations. The main issue is the abrupt end of the e-car purchase incentive and the tax break for agricultural diesel. He also emphasized that the Bundestag draws up the budget. “And that is why we will now look at all the proposals until the 2024 federal budget is finalized at the end of January.”
Farmers demonstrate
Agriculture Minister Cem Özdemir (Greens) and the FDP parliamentary group strongly criticized the plans to abolish tax breaks for farmers. In the ARD “Morgenmagazin” Özdemir warned of disadvantages for German farmers in international competition. There are no alternatives for farmers when it comes to agricultural diesel. “We’re talking about heavy machines that can’t simply be converted to electric.” Farmers should not be overwhelmed, said Özdemir. He made alternative savings suggestions to Federal Finance Minister Christian Lindner (FDP). In Berlin, farmers demonstrated against the plans with tractors on Monday.
So far, farms have been able to get a partial refund of the energy tax for diesel. In addition, agricultural and forestry vehicles are exempt from vehicle tax.
FDP parliamentary group leader Christian Dürr announced a veto against the cancellation of the tax breaks. “The FDP parliamentary group does not consider the heavy burden on agricultural businesses to be acceptable,” he told the German Press Agency in Berlin. Finance Minister Lindner appeared open to alternatives in the Germany editorial network. In this context, CDU leader Friedrich Merz spoke of tax increases in an email to his supporters and announced that the Union would “work very emphatically to ensure that these tax increases do not come.”
Meanwhile, SPD leader Lars Klingbeil suggested expanding the commuter allowance. “I am in favor of us having the debate about raising it and ensuring that the working population is relieved,” he said on the Bild podcast “Ronzheimer”. When it comes to the traffic light coalition’s budget compromise, it is clear: “There are burdens for the working middle class. I’m not happy about that either.”
Abrupt end to the e-car purchase promotion
The commuter allowance is deducted when calculating income tax for the one-way distance between home and work. It is 30 cents per kilometer, from the 21st kilometer onwards 38 cents.
The abrupt end to government support for the purchase of electric cars, announced by the Federal Ministry of Economics at the weekend, also caused irritation. As of the end of Sunday, no new applications for the environmental bonus could be submitted to the Federal Office of Economics and Export Control (BAFA), as the ministry announced on Saturday. Funding that has already been promised is not affected and will be paid. Applications received by Bafa up to and including December 17, 2023 will be processed in the order in which they are received. Anyone who has already bought a car but has not yet applied for funding will come away empty-handed.