A new relief package is needed - but why is it still failing?

Created: 08/09/2022, 12:42 p.m

By: Yannick Hanke

The traffic light coalition has already agreed on a new relief package.

However, it should not come until 2023. In terms of content, there is still a lot to be clarified.

What exactly?

Berlin – “Winter of Anger”, “Winter of Desperation” – with a view to winter, the superlatives are overwhelming.

At least the lower third of the income population in Germany will not be able to take the high energy costs into account in the truest sense of the word.

At least that's what the German Tenants' Association (DMB) estimates.

The traffic light hits a similar notch and knows that the current relief alone is not enough.

A new relief package is needed.

But why only 2023?

What's the problem?

New relief package: long overdue due to additional costs for citizens in Germany

A new relief package results simply from looking at the additional costs for the citizens of Germany.

It was only at the beginning of July 2022 that the Institute for Macroeconomics and Business Cycle Research (IMK) in Düsseldorf calculated the following: A couple with two children who have a monthly net household income of between 3,600 and 5,000 euros would have to pay for the current one without the measures from the 2022 relief package that have already been decided Spend 1,927 euros more on energy and food for the full year.

The new relief package is a matter for the party leaders and leads to two camps.

Because Lars Klingbeil (SPD) and Ricarda Lang (Greens) on the one hand and Christian Lindner (FDP) on the other do not always agree.

© Fabian Sommer/Britta Pedersen/dpa/imago/Montage

On the other hand, single people with an average income are confronted with an average additional expenditure of 891 euros.

However, the gas allocation planned by Federal Minister of Economics Robert Habeck (Greens) has not yet been taken into account here.

According to calculations by the consumer

, a single household could incur additional expenses of between 89 and 298 euros.

For a family of four, the additional costs could even amount to over 1000 euros.

New relief package: What have the previous reliefs achieved in 2022?

While the calls for a new relief package are getting louder and politicians are being held accountable, it is worth taking a look back.

How have the Federal Government's relief packages so far actually had an impact?

Did they noticeably reach the citizen?

The fact is: the two relief packages that have already been decided for 2022 have a total volume of 30 billion euros.

And by no means all of the measures have come into force.

An example of this is the one-time energy allowance of 300 euros, which is only paid to employees in September.

Overall, however, the IMK assumes that the burden will be considerable.

In other words, for a family with two employees and a low income, at least 64 percent of the additional costs would be compensated for by increased food and energy prices.

And with a middle income it is at least 54 percent.

The situation is significantly worse for a family of four with only one employee.

Here the relief is only 44 percent.

The relief for people on basic security is around 90 percent.

According to the IMK, only pensioners with low incomes were only slightly relieved - insofar as they do not receive basic security and do not receive a heating subsidy.

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New relief package: traffic light coalition in dispute - abolition of cold progression polarized

The new relief package, how could it be otherwise, also brings with it various frictions and disputes.

The demand by Finance Minister Christian Lindner to abolish cold progression is particularly controversial.

This is viewed critically above all by the Greens and the SPD.

It would simply be too expensive, the federal government alone would have to bear a third of the costs of eleven billion euros.

What does cold progression mean?

The term "cold progression" describes an effect by which someone slips into a higher tax rate through a wage increase - which in turn only compensates for inflation.

In terms of purchasing power, this person ultimately has less purchasing power available.

The dismantling of the cold progression would be most profitable, especially for "the highest incomes", criticizes Michael Schrodi, spokesman for financial policy of the SPD.

Rather, it is for direct payments, which would primarily benefit people with low and middle incomes.

New relief package: Citizens' allowance, moratorium, 9-euro ticket and commuter allowance in focus

In principle, the SPD, FDP and Greens are in favor of a new relief package.

But there is still no consensus on many points that satisfies all sides.

From 2023, the citizen's allowance should replace Hartz IV.

In the course of this conversion, a significant increase in basic security is to be made.

The SPD and the Greens hold this position.

The FDP, in turn, wants to make the new socialization less bureaucratic in the first place.

The additional income opportunities, for example through lucrative mini-jobs, are also to be improved.

As part of the new relief package, the FDP is also skeptical about the moratorium favored by the Greens and SPD.

The two governing parties want to protect people who will probably not be able to pay their electricity and gas bills in the coming winter.

And an adequate follow-up project for the 9-euro ticket also remains controversial.

Lindner wants nothing to do with a "free mentality", SPD leader Lars Klingbeil is considering financing through a special tax on high additional profits from energy companies.

Lindner is against it, but his party wants to push for an increase in the commuter allowance.

Christian Lindner and the new relief package: Minister of Finance wants to raise the basic tax allowance and child benefit

The new relief package, which is far from finished, does not only lead to a war of words.

Sometimes there is even a consensus among the governing parties.

The Greens and SPD are in favor of Lindner's proposal to increase the basic tax allowance from 10,348 to 10,933 euros - albeit not until 2024.

Lindner also wants to raise child benefit by eight euros per month.

This should take effect in 2023, for 2024 another increase of six euros is planned.

A project that is also welcomed.

However, the specific amount of the increase could still lead to disputes.

In this context, Federal Family Minister Lisa Paus (Greens) only speaks of a “relevant increase”, she does not name a number.

New relief package: the left calls for electricity price caps and government price controls

Of course, there are other suggestions and ideas for the new relief package.

For example, the left calls for an electricity price cap and government price controls.

She receives support from the German Trade Union Confederation (DGB), which positions itself clearly:

The pressure needs to be taken off everyone by capping residential energy prices.

DGB boss Yasmin Fahimi with her demand for the new relief package to the editorial network Germany

The traffic light does not exactly react to this with love.

The financial policy spokesman Schrodi only notes that the electricity price cap is a state subsidy at the end of the day.

And people who could certainly afford the higher price would also benefit from this.

The new relief package will not come until 2023 – or earlier if energy prices continue to rise

As outlined at the beginning, the new relief package will probably have to wait until 2023.

According to coalition circles, at least the second meeting of the concerted action should be awaited.

Here, representatives of employers and trade unions come together in the Chancellery and seek dialogue with Chancellor Olaf Scholz (SPD).

However, the appointment is only scheduled for mid-September.

After that, however, concrete plans regarding the new relief package should be presented.

And above all fast.

But most of the measures that are currently being discussed are mostly about relief that would only take effect next year.

But what if energy prices continue to rise inexorably?

Then further measures could and should be taken this year.

To avert the "Winter of Rage".