Economy: Conflict over growth package continues before Federal Council vote

Economy: Conflict over growth package continues before Federal Council vote

The law provides tax relief and less bureaucracy for companies. At the same time, relief for farmers is promised. But it remains unclear whether the states will say yes to the relief package.

Today the Federal Council will finally vote on the federal government’s planned growth package for companies. The states had appealed to the mediation committee about the law with tax relief and reductions in bureaucracy because they feared loss of revenue.

The CDU and CSU also made their approval dependent on the federal government relieving the burden on farmers. The Prime Minister of Mecklenburg-Western Pomerania, Manuela Schwesig (SPD), appealed to the Union-governed federal states to approve the growth package. However, Bavaria wants to block the Growth Opportunities Act again in the Federal Council.

The federal government has not yet presented an agricultural package

In the mediation process, the volume of tax relief and bureaucracy reductions was reduced from the previously planned 7 billion euros to 3.2 billion. However, the Union did not agree to the result. She wants the cuts in subsidies for agricultural diesel to be reversed – or the farmers would have to be relieved to the same extent through other measures.

The federal government has not yet presented an agricultural package, but has promised relief for farmers. They are “in close contact with the profession,” said Agriculture Minister Cem Özdemir (Greens). Relief from income tax and a strengthening of farmers in the value chain are being prepared. Above all, it is about reducing bureaucracy.

Schwesig: “Important impulses for the economy”

The gradual dismantling of agricultural diesel subsidies is also up for vote in the Federal Council today. The states have the opportunity to call the Mediation Committee on this too. However, this would also put on hold other measures that the federal government has decided to consolidate the budget for 2024, such as the higher aviation tax and stricter sanctions on citizens’ money.

“The Growth Opportunities Act contains important impulses for the economy. There are tax reliefs, especially for the construction industry and small and medium-sized companies,” said Schwesig to the “Rheinische Post”. A good compromise was found in the mediation committee of the Bundesrat and Bundestag and a signal was needed that economic progress was being made. “It would be irresponsible if the Union were to harm Germany as a business location for purely party-tactical reasons.” Finance Minister Christian Lindner (FDP) also called on the Union to agree to the growth package.

The Bavarian Prime Minister Markus Söder countered: “The Growth Opportunities Act does not provide any significant relief for the economy and massively disadvantages agriculture.” The CSU leader in the “Augsburger Allgemeine” cited the federal government’s commitment to the gradual abolition of agricultural diesel subsidies as the reason for the blockade. “Only when the unfair increase in agricultural diesel is completely withdrawn can Bavaria agree.”

Source: Stern

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