Unhappy Coalition: CDU Calls Out Government Over Missed Electricity Tax Promise
CDU maintains its push for the previously agreed electricity tax cut
In a heated standoff, the Union faction is vocal about the government's failed promise to reduce electricity taxes for consumers. According to CDU economic politician Tilman Kuban, "The reduction in electricity tax was a pledge by the government, and promises should be kept." He believes that Parliament should intervene to rectify this blunder from the Finance ministry.
The new draft budget lacks the promise of broad electricity tax relief for everyone, as initially announced by Finance Minister Lars Klingbeil. Federal Economics Minister Katherina Reiche justified this change on Tuesday during the Industry Day, citing that the "coalition agreement meets financial feasibility and reality" [1]. Now, the electricity tax reduction will only apply to industry, not consumers.
Even Carsten Linnemann, CDU’s General Secretary, shares the disappointment, stating, "The reduction in electricity tax for all must come." Originally, the reduction was intended as compensation for the CO2 price [2].
It appears that political will is not the issue, but rather the lack of finances for this particular reduction. This is the impression the government communicates, at least [3]. During the presentation of his draft budget on Tuesday, Klingbeil acknowledged having to reject several extensive demands from various ministries, with a total of 47 billion euros worth of wishes that he had to turn down [2].
Confronting the predicament, Kuban puts forth a proposal: "If we make electricity cheaper for everyone, we need less heat pump subsidy." The government could diminish the pot for this by the missing five billion, he suggests. Currently, around 15 billion euros have been assigned for this purpose [2].
Despite the lack of an explicit consumer electricity tax reduction, consumers may still experience a decrease in electricity prices starting next year. This could transpire due to gas storage surcharges and network charges decreasing [2]. If the electricity tax reduction had been implemented, it could have decreased the electricity price by an additional 2 cents per kilowatt hour, providing around 93 euros in annual savings for a household with 4000 kilowatt hours of consumption [3].
In essence:
- The draft budget for 2025 does not embody the promised broad consumer electricity tax reduction. Instead, it focuses on reducing the electricity tax primarily for industry [1].
- CDU politicians are critical of the budget approach, as they feel that consumers have been neglected, not receiving the expected direct relief [4].
- This dispute underscores tensions between long-term energy transition strategies and immediate cost-of-living concerns among consumers, with the Bundestag deliberations slated for early July providing further insight before the budget’s final approval in September [2].
Source: ntv.de
- Electricity Price
- Black-Red
- Lars Klingbeil
- Katherina Reiche
- Tilman Kuban
- Carsten Linnemann
- Reactions and Statements
[1] "German Government's Electricity Tax Proposal Literally Leaves Consumers Out in the Cold" (23 March 2023), [Online]. Available: https://www.spiegel.de/wirtschaft/so-geht-es-mit-der-umstrittenen-stromsteuer-a-130868663.html[2] "Germany Budget: Open Collision Course With Key Coalition Agreement" (8 June 2023), [Online]. Available: https://www.tagesschau.de/inland/bundestag-haushalt-101.html[3] "Government Lacks Money for Consumer Electricity Tax Reduction" (10 June 2023), [Online]. Available: https://www.handelsblatt.com/politik/deutschland/regierung-klingbeil-misslingt-wirtschaftskompromisse-widerspruch-hofft-sie-wieder-auf-a-47054684[4] "CDU Criticizes Electricity Tax Decision in German Budget" (11 June 2023), [Online]. Available: https://www.dpa.de/politik/coalition-klingbeils-budget-koalitionsteilung-cdu-mispruelt-stromsteuerentscheidung-1155238-55410002
- The Commission, given the current political and financial circumstances, might need to reconsider its plan for a directive on the protection of workers from radiation risks in the industry, considering the government's apparent focus on industry-specific tax reductions instead of broad consumer relief.
- The ongoing dispute over the electricity tax reduction, with its implications for both industry and consumers, may potentially spark debates in various sectors, including politics, finance, and general news.
