CDU ministers advocate for lowering electricity tariffs across the board
In a surprising turn of events, German state premiers are voicing their disapproval towards the federal government's decision on the reduction of electricity tax. The controversy arises from the government's selective approach, which only extends tax cuts to specific sectors such as industry, agriculture, and forestry, while leaving out citizens and many businesses.
Thuringia's Minister-President Mario Voigt has demanded political reliability, warning that questioning the announced reduction in electricity tax could endanger trust. Similarly, Rhineland-Palatinate Minister-President Alexander Schweitzer has criticised the Chancellor for the lack of funding for the reduction of electricity tax for all.
The disagreement on the electricity tax issue has a negative impact on the governing coalition of Union and SPD, according to Günther, the leader of Saxony-Anhalt. Saxony-Anhalt's Minister-President Reiner Haseloff has called for a correction of this decision by the coalition committee. North Rhine-Westphalia's Minister-President Hendrik Wüst has labelled a lower electricity tax for all a "central relief promise" and is relying on a "clear follow-up in the upcoming parliamentary procedure".
The CDU state premiers are opposing the federal government's decision not to reduce electricity tax for all citizens and businesses. Berlin's governing mayor Kai Wegner has demanded a "clear correction" and emphasised the need for tangible relief. Schleswig-Holstein's Minister-President Daniel Günther has expressed little understanding of this prioritisation and called it "odd".
The new federal government is being criticised for only relieving the industry and not all citizens and businesses with the electricity tax reduction. Private households and many firms still pay high electricity tax. The Association of German Trade and the Association of Wholesale and Foreign Trade (BGA) have urged Federal Chancellor Merz to keep the promises of the coalition and reduce the electricity tax for all companies.
The financial implications of the planned cuts are also a cause for concern. The reduction in electricity tax means a considerable loss of revenue not only for the federal government but also for individual states and municipalities, which adds financial pressure on them. This fiscal impact may be another reason for the state leaders' dissatisfaction, as states face funding challenges due to this loss of revenue that could affect their budgets and local services.
The SPD faction leader Matthias Miersch defends the decision of the coalition committee, stating that they had placed the electricity tax reduction under a financial reservation in the coalition agreement. However, the CDU economic policy spokesman Sebastian Roloff believes the discussion on the electricity tax cut will continue in the budget committee.
Federal Chancellor Friedrich Merz (CDU) and Finance Minister Lars Klingbeil (SPD) have defended the course and referred to budget constraints. The reduction in electricity tax for all would cost around 5.4 billion euros additionally in the coming year, according to the Federal Ministry of Finance. The leaders of Union and SPD decided on Wednesday that there will be no reduction in electricity tax for all companies and private households for the time being.
The letter from the trade associations was also sent to Finance Minister Lars Klingbeil, Federal Minister of Economics Katherina Reiche, and the faction leaders Jens Spahn (CDU) and Matthias Miersch (SPD). The dispute over the electricity tax reduction is set to continue, with both sides presenting their arguments and seeking a resolution that benefits all parties involved.
The CDU state leaders are expressing opposition towards the federal government's decision to relieve only the industry with the electricity tax reduction, urging for a broader relief for all citizens and businesses, thereby affecting sectors such as finance and energy. The reluctance of Staatskanzler Merz to grant this request could potentially escalate the ongoing dispute over the electricity tax reduction.
