Merz proposes a resolution for the electricity levy problem
The ongoing debate over the electricity tax in Germany has taken a new turn, with Federal Chancellor Friedrich Merz proposing a solution to address the issue.
Merz, during an appearance on the ARD talk show "Maischberger", admitted that there is room for improvement in communication within the coalition, particularly regarding the electricity tax. This comes after widespread criticism, even within the Union, over the proposed solution.
The proposed solution aims to provide more support for private households regarding the electricity tax. However, the plan has been met with scepticism, with critics arguing that it could cause market distortions and breach coalition agreements due to budget constraints.
The European Court of Justice (ECJ) has reaffirmed that EU Member States can only levy additional charges on electricity under strict conditions. The recent ECJ rulings have strengthened protections for consumers and businesses, limiting the conditions under which electricity taxes can be levied[1][2][3].
Germany has already implemented selective electricity tax cuts for certain sectors, such as agriculture, forestry, energy, retail, and industrial businesses. However, these cuts have sparked criticism from industry stakeholders who argue that they cause market distortions and exclude many businesses due to budget constraints[2].
The proposed solution by Merz is expected to cost an additional 5.4 billion euros next year, according to the Federal Ministry of Finance. Despite the costs, Merz and Finance Minister Lars Klingbeil (SPD) have defended the course on the electricity tax, citing budget constraints.
The leaders of the CDU, CSU, and SPD will meet for the coalition committee on Wednesday to discuss the matter further. The working methods of the coalition are also set to be discussed, with Merz suggesting that he and his team could have communicated better with their own factions[4].
The dispute over the electricity tax remains a complex issue, with the matter being actively examined by German courts and shaped by recent ECJ rulings. The future of the electricity tax in Germany will depend on the outcome of these legal appeals and the decisions of the fiscal courts, including a review by the German Federal Fiscal Court[1].
Notable critics of the proposed solution include Jens Spahn, the chairman of the Union faction, and Hendrik Wüst, the Minister President of North Rhine-Westphalia. The Federal Ministry of Finance and the Chancellery are working on this solution, and the outcome will have significant implications for the German economy and its citizens.
[1] European Court of Justice ruling, May 2025. [2] Industry stakeholder criticism, June 2025. [3] Updated EU rules, June 2025. [4] Merz's admission of room for improvement in communication, October 2025.
The ongoing debate in policy-and-legislation surrounding the electricity tax in Germany, initially proposed by Federal Chancellor Friedrich Merz, has led to politics becoming intertwined with general-news, especially since the plan has been met with scepticism, raising concerns about market distortions and potential breaches of coalition agreements.
The solution by Merz, which aims to provide more support for private households regarding the electricity tax, is expected to cost an additional 5.4 billion euros next year according to the Federal Ministry of Finance, causing budget constraints to be at the forefront of discussions in policy-and-legislation and general-news, as the leaders of the CDU, CSU, and SPD deliberate the matter further in their coalition committee meeting.
