CDU Proposes Electricity Tax Deal to SPD Amid Controversy

Berlin - Tensions are rising within the coalition government due to the reversal of the promised reduction in electricity taxes. Despite the commitments made by both the CDU and SPD to lower electricity taxes for citizens, Finance Minister Lars Klingbeil has not allocated the necessary funds for this initiative.

Consumers are set to continue paying the full electricity tax, while only the manufacturing sector and agricultural businesses will see relief in the 2026 budget. The reason for this decision is that expanding the tax relief to households would cost an estimated 5.4 billion euros. Consequently, Klingbeil and Chancellor Friedrich Merz have agreed that households will not benefit from any tax reduction.

In a surprising move, the CDU has put forth an alternative proposal. Tilman Kuban, who played a key role in negotiating the energy policy during coalition talks, stated that a universal reduction in the electricity tax is feasible if funding for heat pump subsidies is cut. Approximately 16 billion euros are earmarked for this program in 2026. By reducing electricity costs for those who heat their homes with electricity, the need for subsidies could be diminished.

The government's decision to forgo a reduction in electricity taxes has sparked significant backlash. Many are concerned about the continued high prices for consumers. The controversy surrounding the abandoned plan has led to escalating frustrations within the coalition, with Friedrich Merz publicly addressing the situation and criticizing the handling of the tax issue.

Looking ahead, a coalition committee meeting is scheduled for Wednesday, where members of the CDU, CSU, and SPD will convene to discuss the electricity tax matter. There is considerable anger among SPD members, as they feel blindsided by the CDU's sudden withdrawal from the agreed-upon tax plan. An SPD representative expressed that tensions are likely to rise during the discussions, as it is unacceptable for the Chancellor to support a policy that disadvantages private consumers while his party members advocate for a different approach.

Following the revelation of the tax reversal, CDU General Secretary Carsten Linnemann quickly called for a comprehensive reduction for all consumers. Additionally, NRW Minister-President Hendrik Wüst has criticized Klingbeil for what he characterizes as a breach of trust.