Senior officials are questioning the feasibility of offsetting a potential reduction in electricity taxes through reforms to the citizen’s income scheme. Thorsten Frei, Head of the Chancellery, expressed reservations regarding the proposal’s potential for consensus within the governing coalition.
Speaking to Welt television, Frei stated, “I’m not sure if this is something that can be achieved through coalition agreement”. He emphasized that achieving consensus is paramount, rather than solely focusing on his personal assessment of the measure’s merit.
Frei stressed the importance of agreement in identifying potential funding sources for the tax cuts. While acknowledging the possibility of exploring alternative financing options, he underscored that any such move would require unanimous support within the coalition. “Naturally, we can examine other means and methods and whether they would function for the specific case. It’s clear that if one wants to do something like this, it can only happen with coalition agreement. Therefore, we have to look at this together.
Officials acknowledge a limited timeframe for developing a solution, pointing to the cabinet’s budget plan approval scheduled for the end of July, with parliamentary debate not commencing until autumn. This compressed timeline presents a considerable challenge, particularly given previous budgetary agreements. “It’s a difficult task” Frei admitted, “because we didn’t reach this compromise lightly within the cabinet. It’s difficult to reflect all our wishes and expectations within budgetary constraints. Nevertheless, that doesn’t preclude thoughtful consideration”.
