Coalition leaders agree on relief package

style="float: right; margin-bottom: 10px; font-weight: 600;"Thu 24th Mar, 2022

Due to rising prices, people in Germany are to receive one-off relief in the form of a flat-rate energy tax of 300 euros this year. This was agreed by the leaders of the SPD, Green and FDP coalitions, according to a paper published in Berlin. The money is to be paid to all taxpayers in gainful employment. In addition, fuel prices are to be reduced by 30 cents per liter for gasoline and 14 cents for diesel - for three months.

Local public transport is also to become cheaper: The coalition wants to introduce a ticket for nine euros per month for public transport for 90 days. To this end, the federal government is to pay corresponding subsidies to the states. "To cushion special hardships for families," a one-time bonus of 100 euros will be paid out for each child "as quickly as possible," the paper says. This will be offset against the child allowance. Recipients of social benefits are to receive a further one-off payment: In addition to the 100 euros already decided, another 100 euros is to be paid out per person.

Federal Finance Minister Christian Lindner (FDP) said it was not yet possible to put a figure on how much this would cost the federal government. He reckoned with an order of magnitude like the first relief package, which the traffic light had agreed on at the end of February. At that time, he had spoken of a "clear double-digit billion amount.

The agreement was reached only in the morning after a long meeting. Actually, there should have been no more of that under the traffic light government: At the start of their alliance, the SPD, the Greens and the FDP assured that - unlike the previous government - they would forego agonizingly long night sessions. When key decisions are to be made for the country, it is better if they are made without dark circles under the eyes.

And so Thursday night also marked a turning point for coalition cooperation: at 9 p.m., top representatives of the SPD, the Greens and the FDP sat down together in the Chancellor's Office. The goal: to relieve citizens of the rapidly rising energy costs and to compensate for at least part of the hardships associated with them. It took until almost eight o'clock in the morning to reach an agreement. This is already no longer a night session, but an after-hours agreement.

The components of this agreement are still unclear in the morning. After intensive consultations, the coalition partners had agreed on "extensive and decisive measures to ease the burden on citizens and to strengthen energy policy independence". Details are not to be announced until a press conference of the three party leaders at 11 am.

Prior to the meeting of the coalition leaders, a working group of party representatives had negotiated relief, but failed to reach a final agreement. A draft paper of several pages described relief approaches from the point of view of all three parties, and numerous proposals were up for discussion: FDP leader and Finance Minister Christian Linder, for example, had brought up the idea of a fuel subsidy, but this met with resistance from the coalition partners. The SPD and the Greens wanted a more targeted approach than just giving all motorists a tax break directly at the filling station, regardless of the vehicles' fuel consumption. The Greens want to set strong accents on energy saving. The SPD wants to cushion further hardships, especially for people with no, low and middle incomes.

The coalition had already agreed on relief at the end of February. The price of electricity is to fall as a result of the early abolition of the so-called EEG surcharge for the promotion of green electricity, the commuter allowance for additional journeys to the place of work was increased retroactively, and existing state benefits were also increased or one-off payments were promised. However, doubts quickly arose as to whether the plans were sufficient to even come close to cushioning the price increases.

Image by David Roumanet


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