As of: February 6, 2024, 11:07 a.m
By: Lisa Mayerhofer
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The traffic light government agrees that the weakening German economy needs to be stimulated again.
But Habeck and Lindner disagree about financing.
Berlin – Germany’s economy is in the doldrums.
The industrialized nations organization OECD has revised down the growth forecast for the German economy for this year.
The Paris-based organization announced on Monday that an increase of 0.3 percent is expected.
In November, the OECD was still expecting economic growth in Germany to be 0.6 percent this year.
It is now time for the traffic light government to act - but once again there is a dispute about how the economy should be stimulated.
There is no agreement, especially on the question of how the measures for economic growth should be financed.
Economic plan: Lindner wants to cancel solos - Habeck wants special assets
The main problem: Finance Minister Christian Lindner (FDP) and Economics Minister Robert Habeck (Greens) have brought up a tax reform for companies, but disagree on financing.
And Chancellor Olaf Scholz (SPD) wants to wait for the Growth Opportunities Act to pass.
But first things first:
Robert Habeck (Alliance 90/The Greens), Federal Minister for Economic Affairs and Climate Protection, speaks with Christian Lindner (FDP), Federal Minister of Finance, in the Bundestag.
© picture alliance/dpa |
Michael Kappeler
Habeck proposed a special fund in the Bundestag on Thursday to solve structural problems.
For example, he mentioned the possibility of creating tax credits and tax depreciation options.
Lindner rejected a special fund, saying it would mean new debts.
Instead, the finance minister would like a “dynamization package” that would cover the areas of the labor market, climate protection, energy prices, bureaucracy and taxes.
He suggests abolishing the solidarity surcharge for companies.
According to Lindner, this would also have the advantage that states and municipalities would not be burdened.
But you then have to talk to each other about counter-financing.
The solidarity surcharge
The Soli was introduced in 1991 - a year after German unification - and was intended to help finance economic development in the new federal states.
It was levied until 2020 as an additional levy of 5.5 percent on income and corporation tax in order to finance the burden of reunification.
Since 2021, only top earners and corporations have to pay it.
Last year, the solidarity generated income of around twelve billion euros for the federal government.
Habeck was skeptical about the solidarity proposal.
Canceling the solidarity entirely would increase the budget gap, said the Vice Chancellor on the ARD program “Caren Miosga”.
The two chairmen of the SPD and the Greens, Saskia Esken and Ricarda Lang, also rejected Lindner's proposal.
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Chancellor Scholz wants focus from the Growth Opportunities Act
Chancellor Olaf Scholz (SPD) was cautious about the debate on Monday evening.
He called for the initial focus to be on getting the Growth Opportunities Act passed by the Federal Council.
“It is practical, tangible and works quickly,” said Scholz at a joint press conference with French Prime Minister Gabriel Attal.
The Growth Opportunities Act provides relief for companies of seven billion euros per year.
A mediation process regarding the project is currently underway in the Federal Council.
The Union-led countries are making their approval conditional on the withdrawal of the abolition of subsidies for agricultural diesel.
However, Habeck complains that the law is now smaller than expected and would therefore only have a “homeopathic” effect.
“There is a blatant disagreement between the economics and finance ministries”
Ifo President Clemens Fuest now urged the traffic light leaders to agree on an economic policy strategy.
“There is a blatant disagreement between the economics and finance ministries and as a result there is extreme uncertainty,” said the head of the Munich Economic Research Institute at a panel discussion organized by the OECD, an industrialized nations organization.
An economic policy strategy was also missing in the previous governments.
“It just wasn’t that bad,” Fuest said.
“Because it’s the captain who matters when the ship is in a storm and not when you’re sailing through calm waters.”
With material from dpa and Reuters