Coalition budget measures stir controversy
The coalition's resolution to address billions in budget gaps involves hiking CO2 prices, boosting grid fees for electricity, and cutting or eliminating subsidies. The plan includes selling off company shareholdings to refashion railways despite tight finances.
Frank Werneke, Verdi's chair, expressed skepticism, arguing that the coalition's remedy carries a severe social imbalance. Werneke and the VdK social association advocated for distributing climate funds as compensation to citizens to alleviate the burden of increased CO2 prices on low-income households.
VdK President Verena Bentele shared similar concerns with the Rheinische Post, citing the unacceptable nature of the CO2 price increase without climate money. She also criticized the elimination of the citizen's bonus for further education.
Economist Veronika Grimm agreed, suggesting the introduction of climate money to create acceptance for climate protection - specifically benefiting lower-income citizens. However, she cautioned that politicians could misuse this opportunity to raise prices further.
Michael Herbst, VENRO's Chair, criticized the coalition's proposals, hinting at dramatic cuts to humanitarian aid. The suggested reduction of 930 million euros in the development budget and 400 million euros in humanitarian aid funds have raised eyebrows.
Joachim Rukwied, the German Farmers' Association President, voiced discontent over the coalition's agricultural sector overhaul, including proposed cuts to subsidies. He announced protests against the removal of agricultural diesel concessions and vehicle tax.
Janine Wissler, the Left Party leader, accused Finance Minister Christian Lindner of finagling when she examined the planned sale of federal holdings in the post office and Telekom. She argued that the coalition should instead suspend the debt brake and draw on substantial assets to address the issue.
Labor Minister Hubertus Heil, an Ampel party representative, attempted to assuage concerns, promising that pension fund reductions would not lead to contributions increases or pension level risks in the short or medium term. The promise was backed with a pension package planned for 2024.
Pension fund cuts remained a point of contention, with SPD General Secretary Kevin Kühnert denying cuts to climate protection despite contingent funding program reductions. Fridays for Future activists called for a greater reduction in climate-harmful subsidies.
FDP financial politician Frank Schäffler opposed an exception to the debt brake to finance aid for the 2021 flood disaster. He instead advocated funding it through the general budget.
Further Reading:
Key Insights:
- Verena Bentele of the VdK urged for climate money to be paid out as compensation for the negative social impact of the CO2 price increase on lower-income households.
- Frank Werneke, the chair of the United Services Union, expressed skepticism towards the coalition's solutions for budget gaps.
- Issues related to higher fuel and heating costs for low-income households necessitate financial aid, social security benefits, climate bonuses, transition support, and adaptation measures.
