This is how the government wants to relieve the Germans – politics
Electricity prices have exploded, and on Friday the Russian Gazprom group also closed the Nord Stream 1 pipeline indefinitely. This intensifies Germany’s energy crisis again. In a nightly session on Sunday morning, the traffic light coalition agreed on a new aid package. The numbers are great, the federal government announces aid of over 65 billion euros. But by no means all plans are already set in stone. the Southgerman newspaper summarizes the most important decisions and shows where the federal government still has to do some work:
Electricity price brake against corporate profits
The coalition intends to counteract the rapidly rising electricity and energy prices in particular. In order to relieve private households of electricity costs, for example, the federal government wants to introduce an “electricity price brake”. The traffic light coalition has agreed to siphon off excessive profits from energy companies. Because of the high energy prices within the electricity market system, such “accidental profits” should flow back to the consumers, announced Federal Chancellor Olaf Scholz. The government is talking about a reverse EEG surcharge, which corporations would now have to pay.
The coalition is concerned with burdening electricity producers who are not dependent on gas, which is currently very expensive, but still benefit from generally high energy prices. The profits of electricity producers from renewable sources, coal or even nuclear power are currently very high. The price of electricity is determined on the exchanges by the most expensive power plants – the gas power plants. But only those also have extremely high costs.
The coalition wants to use such “chance profits” from corporations to relieve electricity customers. The government announced that it would campaign for a corresponding regulation at EU level. If that doesn’t happen quickly enough, Germany will implement it nationally. According to Finance Minister Christian Lindner (FDP), an amount in the double-digit billions can be redistributed and the price for “basic consumption” by households and small businesses can be reduced. However, many details are still unclear. Such an electricity price brake is considered legally tricky. There are doubts within the government as to whether it can be implemented really quickly. The Green Economics Minister Robert Habeck is responsible.
In order to avoid further cost increases for electricity, but also for petrol or diesel, the government is postponing the increase in the CO₂ price due from January by one year. The criticism was severe on Sunday. “The exposure is a catastrophic signal for climate protection,” said Marcel Fratzscher, head of the German Institute for Economic Research. “The federal government must consider the long-term transformation in a relief package. This is completely missing in the relief package.”
Successor to the nine-euro ticket
The coalition has also agreed on a successor solution for the nine-euro ticket – without being able to be specific. The goal is a price range for a monthly ticket that can be used nationwide between 49 and 69 euros, according to the decision of the coalition committee. The federal government wants to pay 1.5 billion euros for this. But only if the countries provide the same amount. And here the problems begin. Because the federal and state governments are currently at odds over the financing of local transport. The federal states are demanding billions in aid from the federal government, but Federal Transport Minister Volker Wissing (FDP) has so far rejected this. A quick solution to the dispute is not in sight. The federal states had recently rejected financial participation in a successor solution for the popular nine-euro ticket because of the tight finances. According to Wissing, the new ticket solution should come at the turn of the year. In order to enable savings in CO₂ emissions, the agreement in the transport budget provides for an additional 1.5 billion euros for rail transport – this may create scope for an agreement between the federal and state governments.
Hundreds of euros for pensioners and students
On the other hand, it is clear that the approximately six million pensioners in Germany will receive a one-off payment at the end of the year. As of December 1, 2022, you will receive a so-called energy price flat rate of 300 euros. This corresponds to a total relief of around six billion euros. Students should also receive a one-off payment of 200 euros because of rising energy costs. The federal government will bear the costs for this alone. However, there is no payment date for this yet. The government announced that discussions would now be held with the countries on how the transfer could take place quickly and unbureaucratically.
More housing and child benefit
More people than before should also receive housing benefit in the future. According to the government decision, the circle of beneficiaries will be expanded to two million citizens. So far there are around 640,000 recipients. Chancellor Scholz announced the plans as the “largest housing benefit reform” in a long time. That helps those who have a small income, he said. Housing benefit is a social benefit that citizens receive as a rent subsidy because of their low income. The recipients should also receive a one-time subsidy for the upcoming heating period, a one-person household around 415 euros, two-person households 540 euros. For each additional person, 100 euros should be paid.
Child benefit is also expected to increase slightly. Starting next year, parents will receive 18 euros more per month for the first and second child. In addition, the maximum amount of the child supplement is to increase again by 21 euros to 250 euros.
Less taxes, easier help for employees
The federal government also wants to relieve employees and combat imbalances in the tax system. Because many employees have not yet benefited from salary increases. They are often eaten up again by workers slipping into a higher tax rate. The Federal Government wants to avoid this phenomenon, known as “cold progression”, and adjust the benchmark values for income tax. The 48 million taxpayers should benefit from this. The federal government also wants to exempt additional payments from employers to employees up to an amount of 3,000 euros from taxes and duties. This should make it easier for companies to make voluntary payments and thus prevent inflation from driving wage demands further and causing prices to rise even more.
More money for the poor
The basic security for jobseekers (Hartz IV) will be converted into a citizen’s allowance on January 1, 2023, which will be around 50 euros higher than the previous monthly payments. In addition, the calculation is changed. In the future, the inflation to be expected will already be taken into account – this has not been the case so far, which led to an imbalance due to the high inflation. The standard rate for single people increases from 449 euros to around 500 euros. The standard rates for multi-person households and children should also be adjusted accordingly.
The federal government also wants to handle the third relief package without taking on new debt. The federal budget for 2023 will comply with the rules of the debt brake as planned, said Finance Minister Lindner. No supplementary budget is necessary for the current year either. The coalition of SPD, Greens and FDP had been fighting over the package for several weeks. However, the coalition committee made up of the leaders of the government, parties and parliamentary groups was only able to agree on the measures on Sunday morning after a late-night meeting.