bEconomics Minister Robert Habeck (Greens) has warned against canceling the coalition leaders' compromise on the austerity package. Habeck told the German Press Agency: “If individual struts are now pulled out without inserting new ones, the overall solution collapses. This means that anyone who wants changes in one place must offer coordinated counter-financing that is viable for all parties. But we cannot afford not to give an answer because the budget has to be done.”
Planned cuts to the federal budget had sparked violent protests. On Sunday, the FDP parliamentary group in the Bundestag announced a veto against the traffic light leaders' plans to abolish tax breaks for farmers.
On Wednesday, Habeck, Chancellor Olaf Scholz (SPD) and Finance Minister Christian Lindner (FDP) agreed on how billions in holes in the federal budget for 2024 and in the climate and transformation fund should be plugged following a ruling by the Federal Constitutional Court.
Habeck: Package demands something from everyone
“The Chancellor, the Finance Minister and I have been negotiating intensively for three weeks to develop an austerity package that, as an overall solution, makes further investments possible, secures tens of thousands of jobs, preserves relief and maintains social balance,” said Habeck. He spoke of a package that implements the Constitutional Court ruling, was put together on the basis of existing rules and demands something from all sides. “Cutbacks put a strain on people, and I would have liked to have avoided it.” He can understand everyone affected who is now disappointed.
Habeck continued: “Since calls are now being made in the political sphere not to make cuts in certain areas, I have to say: As politicians, we are obliged to make an overall solution possible. What is not possible for politicians is to evade responsibility and only say where savings should not be made. I would also like to promote e-mobility for longer with the environmental bonus, be able to use more money for the solar industry or cap the costs of network fees. But I know that other things are important and that every cut means hardship. That’s why I defend the compromise that it is.”
For example, the stop to the state purchase bonus for electric cars at the end of Sunday is also controversial. Three deputy SPD parliamentary group leaders had said that the funding stop announced at short notice by the Ministry of Economic Affairs on Saturday was “extremely unfortunate”. They had asked Habeck to organize a more reliable transition.
The Constitutional Court ruling as a result of the Union lawsuit means that the coalition now has to save large sums of billions, said Habeck. “And at the same time we should debate how we can improve our investment rules in the future. It has long been known that I believe that the rules of the debt brake as they stand are out of date. Germany must invest massively in order to keep up with the global competition for future technologies, and it must make the transition socially just.”
Kühnert: Income tax reform does not fail because of Scholz
Meanwhile, SPD General Secretary Kevin Kühnert has called for a reform of the income tax in order to noticeably relieve the burden on 95 percent of taxpayers. “If you promise even the richest of the rich that there will be no tax increases, then the bill will ultimately be presented to everyone else: commuters at the gas pump, consumers in the supermarket, employees with social security contributions,” said Kühnert to the Düsseldorf “Rheinische Post” ( Monday).
Kühnert was targeting the FDP with Finance Minister Lindner. In the struggle for a federal budget for the coming year, he had repeatedly ruled out tax increases. Kühnert admitted: “An income tax reform goes beyond the traffic light coalition agreement, so this is a proposal from the SPD.” Scholz campaigned with this proposal. “The implementation really doesn’t fail because of him.”
What is needed quickly, ideally during this election period, is structural relief for the 95 percent of employees who do not become super rich through their income, said Kühnert. “This requires counter-financing. “The SPD is committed to the fact that the very strongest shoulders, who have largely experienced relief in Germany for 30 years, are more responsible in times of multiple crises,” he said. “For the highest earned income, but especially for the highest inheritances, Germany is certainly not a high-tax country.”
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