Inflation and gas crisis: Lindner is planning relief – but the discussion only begins with the “how”.

Created: 08/12/2022, 09:28

By: Fabian Hartmann

The traffic light coalition wants to further relieve citizens in the face of rising prices.

The FDP promotes changes in the tax system, the SPD and the Greens are skeptical.

It's not the only point of contention.

Berlin – Christian Lindner's job description includes keeping the money together.

So far, so usual for a federal finance minister.

In the debate about the continuation of the 9-euro ticket, Germany's top cashier has now - even by his standards - expressed himself particularly decisively.

A continuation of the popular discount?

Excluded.

"There are no funds available in the financial planning for a continuation of the 9-euro ticket," said the FDP leader of the

.

You can literally hear it, the "Basta".

And Lindner followed up: He was not convinced of a "free mentality à la unconditional basic income" even in local public transport.

"Every tax subsidy for a ticket that does not cover the costs means redistribution," said Lindner.

They are pithy, dashing words.

That Volker Wissing, the FDP's own Minister of Transport, has shown himself open to a successor plan?

Doesn't matter in that case.

Lindner demonstrates hardness.

The debate about further relief has long since picked up speed.

An overview:

Federal Finance Minister Christian Lindner (FDP) wants to reduce the cold progression.

© Kay Nietfeld/dpa

1. Cold progression: SPD rejects Lindner plan

The Minister of Finance speaks of a lack of financial leeway for the 9-euro ticket.

But he sees her elsewhere.

In the

, the FDP boss confirmed his plan for tax relief by reducing the so-called cold progression.

What is meant by this is an effect in the tax system that can ensure that a wage increase that only compensates for inflation leads to a higher tax burden - and ultimately less purchasing power.

Lindner wants to change that.

What initially sounds good has a catch from the point of view of the SPD and the Greens.

High earners are relieved – not as a percentage, but in absolute terms – more than those on low and middle incomes.

"There is still a need for discussion about the Federal Minister of Finance's proposal to reduce cold progression, because Christian Lindner's plans to date would relieve the highest incomes particularly strongly," said Michael Schrodi, spokesman for financial policy for the SPD parliamentary group, in an interview with

from

.

The Lindner plan provides relief of around ten billion euros.

According to Schrodi, around half of this ends up in the 20 percent highest income group.

Compensating for cold progression has been practice for years.

Only: In the past, inflation rates were low - so the costs for the state were manageable.

It's different this year.

"The financial resources are limited, we should use the available resources wisely," said Schrodi.

The SPD finance expert promotes a model that also finds approval among economists: direct payments to citizens.

"Around 90 percent of the population will benefit more from this than from an income tax cut," said Schrodi.

It would be conceivable to raise the energy price flat rate again, to pay out a family supplement or a child bonus.

Pensioners could also receive direct payments through the pension insurance.

"The continuing rise in energy prices presents us with major challenges and the state will not be able to absorb all of the losses in prosperity," Schrodi told our editorial team.

However, the citizens would have to be relieved up to the middle of society.

"We need several instruments to reach as many people as possible," says Schrodi.

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2. Citizens' money as a Hartz IV successor: How high should the benefits be?

Inflation hits people with little money in particular.

Hartz IV recipients have already received a one-time subsidy of 200 euros this year.

From 2023, the previous system of basic security is to be converted into a citizen’s allowance anyway.

The SPD, Greens and FDP have already agreed on this in the coalition agreement.

That's the theory.

However, to put it mildly, there is still a need for advice on the level of benefits and details of the design.

SPD Labor Minister Hubertus Heil would like to weaken the sanctions practice and pay out higher rates, but the FDP is up in arms.

Hartz IV recipients currently receive 449 euros per month.

In addition, payments for rent and heating are taken over.

"In view of rising prices, especially for staple foods, it would make sense to raise the rates," said trade union economist Sebastian Dullien

from

.

Dullien does not want to commit to an exact number – unlike the opposition.

"As long as the standard rate is not increased to the subsistence level of 687 euros and the sanctions remain in place, the basic income also means poverty by law," said the first parliamentary director of the left-wing faction, Jan Korte, to our editors.

The social organizations are also demanding significantly more money, proposing at least 200 euros a month.

The German Institute for Economic Research (DIW) has proposed an increase of 100 euros, limited to six months, as short-term help against inflation.

The Greens have also spoken out in favor of higher performance.

The FDP wants to leave it at inflation compensation.

The increase is planned anyway – but not until next year.

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3. Gas prices: Energy is becoming more and more expensive - opposition and economists for "cover"

The gas surcharge will take effect from October 1st: rising procurement costs should then be passed on to all consumers.

This could increase the price by 1.5 to 5 cents per kilowatt hour.

In addition, suppliers are announcing a series of price increases.

Take Cologne as an example: The regional supplier Rheinenergie charges 18.3 cents per kilowatt hour from October.

Last year, the average price in Germany was around seven cents per kilowatt hour.

What makes the situation so threatening is that the price explosion has not yet reached many consumers.

In politics, the first voices are being raised that the gas surcharge should be financed from tax revenue.

And the idea of ​​a gas price cap is getting more and more support.

What is meant by this is that the state subsidizes basic consumption, the full price only goes beyond that.

Economist Sebastian Dullien has advocated this in the past.

In the meantime, the Union faction is flirting with a “basic tariff for citizens” for low-income households.

Only: If the state subsidizes energy prices, it will quickly become expensive.

And finance minister Christian Lindner is insisting on complying with the debt brake again next year.

4. Commuter allowance: Christian Lindner annoys the Greens

The Minister of Finance is tough on the 9-euro ticket, and Christian Lindner is planning a significant increase in the commuter allowance – which applies not only to cars, but also to buses, trains, bikes and pedestrians – which should apply from the first kilometer.

"This relieves the broad center in our country," said FDP General Secretary Bijan Djir-Sarai recently in the

interview.

The SPD can also make friends with this proposal.

For the Greens, on the other hand, it is a provocation.

They already reluctantly accepted the last increase.

Because: The commuter flat rate subsidizes the long car journey as well as the journey with the ICE.

Some of the Greens would prefer to get rid of the commuter allowance entirely – at least as it currently is.

That, in turn, cannot be done with the FDP.

The ecological steering effect may be doubtful, but it is quite possible that the lump sum will become part of a larger relief package.

Debate on discharge: When can an agreement be expected?

At the beginning of July, Chancellor Olaf Scholz (SPD) invited representatives of employers and trade unions to a “concerted action” for the first time.

The second meeting will take place in the Chancellery in mid-September.

This date is still to be awaited.

After that, things could go quickly, according to coalition circles.