New relief package: traffic light decision: 300 euros energy price flat rate and less taxes on fuel
Berlin “It was a long night,” said SPD leader Lars Klingbeil on Thursday morning with small, narrowed eyes. The coalition leaders had been negotiating the federal government’s new relief package for a full eleven hours from late Wednesday evening. It wasn’t until Thursday morning that we finally got a result. The negotiations dragged on for so long that Chancellor Olaf Scholz (SPD) even arrived late at the NATO summit in Brussels and missed the opening photo.
Actually, such long nights of negotiation should be a thing of the past. However, the SPD, the Greens and the FDP had gotten too caught up in the question of how best to relieve the burden on citizens in view of the high energy prices. Klingbeil admitted that the talks had a different focus.
In the end, the coalition leaders agreed on a whole series of results. All taxpayers will receive a one-off payment, and the energy supply is to be broadened.
The fuel discount demanded by the FDP, but controversial, will not come, instead there will be a temporary tax reduction on fuel. At the same time, the speed limit demanded by many environmental organizations and the Greens is not reflected in the paper.
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The “magnitude of the second relief package” probably corresponds “roughly to that of the first relief package,” said FDP leader Christian Lindner. The first package, approved just over a month ago, had a volume of 16 billion euros. In total, the relief provided by the two relief packages totals around EUR 30 billion. However, it is not yet possible to put a precise figure on this, according to Lindner.
The resolutions of the relief package in detail:
- Energy price flat rate: All taxpayers receive a one-off energy price flat rate of 300 euros as a salary subsidy. Payment is made via the employer’s payslip. The lump sum is subject to regular income tax.
- High earners receive less net than low earners because they pay higher taxes on the flat rate. This lump sum was particularly important to the SPD. It is not yet clear when the lump sum will be paid out. In coalition circles there is talk of summer.
- In addition to child benefit, families receive a one-time bonus of 100 euros, which is paid out via the family benefits office, to cushion particular hardship. The bonus is offset against the child allowance. High earners therefore do not benefit from this measure.
- Transfer recipients will receive a further 100 euros in addition to the one-time payment of 100 euros that has already been decided.
- The sharp rise in fuel prices will be cushioned by a three-month reduction in the energy tax on fuel. FDP boss Lindner said that this would make petrol 30 cents a liter cheaper and diesel 14 cents a liter cheaper. The FDP demanded that drivers be relieved.
- The traffic light is also issuing a temporary, nationwide discounted local transport ticket. For a period of 90 days, the traffic light is introducing a public transport ticket for just nine euros a month. The relief is planned for the summer, according to coalition circles. Holders of a monthly and annual ticket should also benefit.
- With an amendment to the Building Energy Act, the traffic light wants to make the efficiency standard 55 binding for new buildings from 2023. From 2024, every newly installed heating system should also be operated with 65 percent renewable energy. In addition, there should be other funding programs, for example to replace heating systems that are more than 20 years old and for energy-efficient building renovation. The Greens in particular had pushed for this.
How much the package was knitted with a hot needle became apparent just a few minutes after the measures were presented. For example, the coalition paper mentions “taxable workers” who should benefit from the flat-rate energy price. It is therefore unclear whether pensioners will also be able to benefit from the flat-rate energy price. Here the opinions in the coalition differ. It is also questionable how complex the settlement of the lump sum is for the tax company. Tax experts fear an immense amount of bureaucracy here.
There was also immediate trouble about the planned discounted local transport ticket. According to Handelsblatt information, the decision caused great confusion among local transport companies. Nobody spoke to them in advance, and it was also completely unclear how this discount should be implemented, the companies said. “We are at a loss and do not discover the ration,” said Eva Kreienkamp, head of the Berlin transport company, the Handelsblatt.
Federal Transport Minister Volker Wissing (FDP), on the other hand, defended the decision, which was said to have been included in the package at the urging of the Greens. The planned local transport ticket is “a real signal,” he told the Handelsblatt. “We want to make the use of public transport particularly attractive at the moment and motivate people to take advantage of the offers. We will reimburse the countries for the ticket prices. I will discuss the details with the federal states tomorrow as part of the special VMK.”
Energy costs: federal states are demanding 900 million euros from the federal government
At the meeting, the federal states want to demand 900 million euros from the federal government simply because of the increased energy costs, as can be seen from the draft resolution that is available to the Handelsblatt. The federal states are expecting these additional costs in local transport this year. They cited the increased energy costs as the reason, which they did not want to pass on to the passengers so as not to make it more difficult to switch to buses and trains.
The federal states are also negotiating with the federal government the Corona rescue package for 2022 and higher regionalization funds of 750 million euros this year alone in order to advance modernization. In addition, there would now be the missing income from the special ticket, which should also apply to annual ticket holders.
Transport politicians from the SPD are also upset. Local transport is suffering greatly from the high energy prices. The fact that customers of all people should now receive a discount was met with a corresponding lack of understanding. On Thursday evening there should be a special parliamentary group meeting of the SPD.
Despite these problems, FDP leader Lindner saw the coalition leaders’ agreement as proof of the government’s ability to act. “The coalition believes that we must protect people and the economy in the short term and temporarily in the face of these enormous price increases.”
The Greens were also satisfied with the result. Party leader Ricarda Lang said that the traffic light coalition will not be able to compensate for every burden. However, local public transport is now being massively supported and made significantly cheaper for three months. In addition, the coalition wants to improve energy efficiency, for example through subsidies for the replacement of gas heating systems. These decisions made it easier to make compromises in other areas, such as reducing the mineral oil tax.
Relief package: This is how economists judge the decisions
The decisions of the coalition met with a mixed response among economists and in business. Peter Adrian, President of the Association of German Chambers of Industry and Commerce (DIHK), said that the decisions of the governing coalition could not really alleviate the major concerns in the economy.
“From the point of view of many companies, the reduction in energy tax for three months is just a drop in the ocean – it cannot help the industry that is particularly hard hit anyway,” says Adrian.
The economist Achim Truger described the resolutions as a “classic compromise”. The fuel price tax brake is “bad”, but Truger praised the energy flat rate, the child bonus and the discounted public transport ticket.
The economist Dominika Langenmayr described it
The party and parliamentary group leaders met with Chancellor Scholz on Wednesday evening. Even before the meeting, there was agreement that there should be further relief for the prices for fuel, gas and electricity, which had risen sharply again as a result of the Ukraine war.
Traffic light decides on further relief package for energy costs
Another aim of the federal government was to reduce dependency on gas, oil and coal from Russia in view of the Russian war of aggression against Ukraine. However, the federal government is currently rejecting an energy embargo.
The deliberations were complicated by the surprising announcement by Russian President Vladimir Putin that Russian gas deliveries would in future be paid for in rubles. Economics Minister Robert Habeck (Greens) called the announcement a breach of the contracts. The federal government will discuss the step with its European partners.
The gas industry was irritated. The Federal Association of Energy and Water Industries (BDEW) has already called on the federal government to declare the early warning level in the national “Gas Emergency Plan”. BDEW boss Kerstin Andreae told the German Press Agency on Thursday in Berlin: “There are concrete and serious indications that we are coming to a deterioration in the gas supply situation.”
More: You can follow the current developments in the Ukraine war in our news blog