Merz's urgent letter to Scholz – twelve measures for the German economy

The head of the Union, Olaf Scholz, delivers twelve measures to benefit the ailing economy. The proposals should end up in the Bundestag as soon as possible.

Berlin – Olaf Scholz’s visit to the USA was dominated by the war in Ukraine. In Washington, the Chancellor vehemently advocated for further aid for the country that was attacked by Russia almost two years ago. Meanwhile, the Union leadership looks with horror at the Federal Republic, whose economy is in crisis.

Merz letter to Scholz: Twelve measures to strengthen the German economy

In order to quickly counteract the development, the strongest opposition party developed an immediate program of twelve measures for the next two months. CDU leader Friedrich Merz and CSU regional group leader Alexander Dobrindt wrote a corresponding letter, which was sent to the head of government as an urgent letter. Among those who quote from the letter are: German Press Agency (dpa) and the Agence France Press (afp)first had that ARD-Capital Studio reports.

Merz and Dobrindt are therefore calling on Scholz and his government, among other things, to permanently reduce the electricity tax to the European minimum, to halve network fees and to impose greater sanctions on those receiving civil benefit if they refuse to accept work. In addition, a business project will automatically be considered approved in the future if the responsible authority has not yet made a decision on it after three months.

Further proposals from the Union leadership are to limit social security contributions to a maximum of 40 percent of gross wages, to give tax advantages to overtime for full-time employees, to make the first 2,000 euros of income per year tax-free for pensioners, and to impose taxes on retained profits – i.e. profits remaining in the company to reduce by 25 percent. It is suggested to introduce weekly working hours instead of daily, as this approach could offer more flexibility for employees and employers.

Merz and Dobrindt think about the economy: calling for the tax increase for farmers to be withdrawn

In addition, the traffic light coalition should completely reverse the tax increases for farmers. The end of subsidies for agricultural diesel drove tens of thousands of farmers nationwide to protest in January following a call by the German Farmers' Association, but the measure as a result of the government's budget gap was probably just the straw that broke the camel's back for the industry.

In addition, Merz and Dobrindt are calling for the “European Supply Chain Directive” project to be stopped and for the Supply Chain Act, which has been in force since last year – which aims to ensure compliance with environmental and human rights but has apparently not been fully thought through – to be suspended and revised. In addition, the pact agreed with the states to accelerate planning in the transport sector should be passed by Easter – i.e. by the end of March.

In addition, a “burden moratorium” is intended to ensure that no additional bureaucracy is created for businesses and citizens by the end of 2025. New subsidies are not among the twelve short-term measures. However, the Union is also promoting medium and long-term interventions to strengthen the competitiveness of the German economy.

Merz and Dobrindt warn Scholz: “Loss of wealth on an unprecedented scale”

“The economic prospects for our country will continue to deteriorate significantly in 2024,” Merz and Dobrindt are quoted in the letter: “Our country is threatened with a loss of prosperity to an extent previously unknown.” So far, it is expected that the gross domestic product will rise this year shrinks again by 0.3 percent.

The Union duo therefore wrote to the SPD Chancellor: “We appeal to you and the entire federal government to take effective measures in the first quarter of the current year so that the German economy can quickly emerge from the recession.”

The CDU and CSU parliamentary group wants to submit the written measures for parliamentary discussion in the next week of the Bundestag session. This takes place from February 19th to 23rd. Merz and Dobrindt are urging Scholz to “create the necessary unity within your coalition” with regard to their measures.

FDP and Greens on Union proposals: Traffic light parties refer to the Growth Opportunities Act

The contents of the letter were approved by FDP parliamentary group vice-president Christoph Meyer, who explained: “If the Union is serious about the proposals, we welcome it.” Parts of it would correspond to the FDP program. However, he considers it dubious to bring forward measures without counter-financing after the Budget for the current year has just been approved and the debt brake is to be adhered to for the first time since the beginning of the corona pandemic.

Meyer further referred to the Future Financing Act and the Growth Opportunities Act, with which the traffic light has already decided on measures to benefit the economy. Andreas Audretsch, de
puty leader of the Green Party in the Bundestag, also alludes to this by emphasizing: “If Friedrich Merz wants to do something for the economy, he should agree to the agreement on the Growth Opportunities Act.” The Union is blocking this in the Bundesrat because of the deletion already mentioned of agricultural diesel subsidies.

German economy in crisis: Haseloff points to scope for debt brake

Reiner Haseloff also insists on a rethink on this point. “There has to be a signal that we take farmers and their concerns seriously,” says the Prime Minister of Saxony-Anhalt in an interview with Handelsblatt (article behind a payment barrier).

The CDU politician further suggests: “We should reduce state taxes on energy as much as possible and forego the income – in the expectation that we will then benefit again as a state with more growth.” This also applies to countries and Municipalities that should “be relieved elsewhere”.

In addition, the state father, who has been in office since 2011 and is therefore the longest-serving state father, points out that he should use the “leeway” that the debt brake offers: “If the federal government were to declare an emergency, that could provide great momentum for the economy.” Article 115 of the Basic Law includes: that “in the event of natural disasters or exceptional emergency situations that are beyond the control of the state and have a significant impact on the state’s financial situation,” the financial limit of the debt brake can be circumvented – if the Bundestag agrees to this. (mg, with dpa and afp)