The coalition committee meets on Saturday morning to discuss new measures in the face of high energy prices. The coalition committee includes representatives of the SPD, Greens and FDP from the party, parliamentary group and federal government.
The German Social Association (SOVD) calls the decision on a third relief package more than overdue. “Because people finally need certainty that they can get through the winter without being afraid of sitting in cold apartments and in front of empty refrigerators,” says Federal Executive Chair Michaela Engelmeier. The SOVD calls for a heating cost component in the housing allowance, the waiver of gas and electricity cuts, a flat-rate energy price for pensioners and students, as well as an inflation allowance for everyone.
The Verdi union is threatening nationwide protests if citizens are not sufficiently relieved. “In order to compensate for the financial hardship caused by the energy price explosion, the state will have to spend an additional 20 to 30 billion euros this year,” said Verdi boss Frank Werneke Augsburg General. Verdi is also preparing demonstrations with other trade unions and social organizations over the course of the autumn. “They will be necessary if the federal government does not sufficiently relieve the burden on the citizens.”
The left and AfD have also announced that they will organize protests. If, in addition to the rapidly rising prices for gas and electricity, there should actually be an energy shortage in winter, some see social upheaval in Germany. The trigger for the price increases was Russia’s attack on Ukraine – but support for Ukraine could crumble, it is feared, and also for the German government. The coalition therefore wants to counteract this with relief.
According to Chancellor Olaf Scholz, the government “agrees to want to do something for those who earn little money”https://www.sueddeutsche.de/politik/.”We want to reform the housing allowance so that more people benefit from it, and we will replace Hartz IV at the beginning of next year with the new citizen’s income,” he affirmed in the West German General Newspaper. “And we will do something for pensioners and students and lower taxes for many.”
The Green Youth calls for an energy price cap, an excess profit tax, direct payments and the continuation of the nine-euro ticket. “The traffic light must create a real rescue package for people, because time is of the essence,” says Sarah-Lee Heinrich, co-head of the Green youth organization. The federal government must follow up with action and finance minister Christian Lindner (FDP) give up the austerity course, Heinrich demands. “The suspension of the debt brake in 2023 is necessary.”
16 percent more taxes in the first half of the year
The debt brake sets strict limits on new federal borrowing. According to leading tax estimators, the coalition can finance the third relief package primarily with additional tax revenue. From January to July, the federal government took in 16 percent more taxes than in the previous year and is therefore six percentage points higher than previously expected, said Nils Boysen-Hogrefe from the Kiel Institute for the World Economy of the Düsseldorf Rheinische Post. In the first half of the year, sales tax alone was 29 billion euros more than in the previous year. However, the good development in the second half of the year cannot simply be continued. For the tax estimator at the German Institute for Economic Research, Kristina van Deuverden, there are indications that many companies had revised their profit expectations down too much because of Corona and are now paying back taxes. Her colleague Max Lay from the Munich Ifo Institute points out that government spending did not increase so much in the first half of the year due to the end of Corona aid, which could result in some leeway.