Pressure is mounting on Germany’s governing coalition of the Union and SPD parties ahead of a key meeting this Wednesday, as unions are urging the government to honor its original commitment to reduce the electricity tax for all consumer groups.
Stefan Körzell, a board member of the German Confederation of Trade Unions (DGB), expressed concern that the ongoing debate surrounding the electricity tax represents a problematic start for the new government. He emphasized that the coalition agreement explicitly stipulated a reduction in the electricity tax for all as an immediate measure. Körzell urged the entire government to swiftly implement this promise.
Finance Minister and Vice-Chancellor Lars Klingbeil (SPD) recently announced, during the presentation of the budget proposal, that the electricity tax reduction would be permanent for industry and the agricultural and forestry sectors only, excluding private households and smaller businesses. This decision was subsequently confirmed by the Federal Cabinet.
However, the coalition agreement between the Union and SPD parties previously stated the intention to reduce the electricity tax “for all” to the European minimum level as an immediate measure. Klingbeil and Chancellor Friedrich Merz (CDU) have cited budgetary constraints, with the Finance Ministry stating that a reduction for all groups would incur additional costs of 5.4 billion euros. Notably, dissenting voices regarding Klingbeil’s plans have emerged within the CDU and CSU.
Körzell now contends that the coalition committee must revise the budget proposal. He argues against framing the electricity tax reduction as a tradeoff against crucial investments or social welfare programs. He underscored the need for relief on energy prices for workers, a robust economy and social security. Körzell concluded that instead of solely focusing on cost-cutting, Union and SPD need to pursue a future-oriented fiscal policy.
