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Economic policy: traffic lights increase pressure on the growth package – no agreement

Economic policy: traffic lights increase pressure on the growth package – no agreement

There is an “inauthentic result” in the mediation committee – which specifically means: The Union continues to block the traffic light growth package. Now what that means.

In the struggle for a growth package for companies, the traffic light coalition has increased the pressure on the Union. There was no real agreement between those involved in the mediation committee of the Federal Council and the Bundestag in the evening. With the votes of the traffic light majority, the committee accepted a negotiation result on the Growth Opportunities Act. Because the Union did not agree, there will now be a showdown on March 22nd in the Federal Council. The controversial law will then be voted on again in the state chamber.

After the meeting, Finance Minister Christian Lindner (FDP) accused the Union of refusing to respond to the German economy’s calls for relief and growth impulses. The Green Party’s parliamentary group deputy, Andreas Audretsch, said that the Union had left the economy “out in the cold because of tactical games to raise its own profile.” “I believe that the German economy will have no understanding whatsoever,” said FDP parliamentary group leader Christian Dürr. The pressure on the CDU and CSU is now considerable. CSU regional group leader Alexander Dobrindt, on the other hand, criticized that it was a bad result without the consent of the Union. The opportunity to build a bridge was missed.

What the law is about

Originally, it was supposed to be an all-round blow worth billions for all industries, which would provide relief for companies in the economic downturn and encourage investments in climate protection. Lindner had proposed almost 50 tax policy measures. Essentially: a bonus for climate protection investments, plus tax support for research, better offsetting of losses and the reduction of bureaucratic hurdles.

What the countries had against it

The Federal Council blocked the package passed by the Bundestag with the argument that states and municipalities would have to shoulder a large part of the costs and tax losses. The state chamber therefore called the mediation committee. In initial discussions, the negotiating partners reduced the volume of relief from the previously planned seven billion euros annually to 3.2 billion euros. Basically, all that was left was a light version – primarily tax relief and incentives to stimulate the construction industry. The climate protection investment bonus, originally the core of the law, has been overturned.

What does this all have to do with agricultural diesel?

SPD-led states were satisfied with the slimmed-down solution, but the Union made an additional condition for its approval: the SPD, Greens and FDP would have to forego the abolition of the tax relief for agricultural diesel for farmers, which the Bundestag had already decided on. The Union representatives also stuck to this in the mediation committee.

Federal Council President Manuela Schwesig (SPD) said that the traffic light government had made it clear that it was in discussions with farmers to find common solutions. The states expected proposals by the Federal Council meeting on March 22nd. However, Dobrindt said he had no confidence that the traffic light would produce a substantial result with the farmers by then.

What the result of the mediation committee means

The committee has 32 members – 16 each from the Bundesrat, mainly the Prime Minister, and 16 from the Bundestag. In contrast to votes in the Federal Council, the state representatives are not bound by instructions here. This means: If a coalition government in a state cannot agree on a position, the state does not have to abstain, unlike in the Federal Council.

According to reports, the Union wanted the mediation committee to be postponed – but the traffic light side rejected this. The SPD, Greens and FDP also did not want to respond to the Union’s demand and withdraw the abolition of agricultural diesel. The Union has shown no interest in talking about the Growth Opportunities Act itself, criticized Green Party leader Britta Haßelmann. The CDU and CSU were solely concerned with the political connection with agricultural diesel.

This led to a so-called spurious result: with the majority of the traffic light and without the consent of the Union, the mediation committee accepted the result of the negotiations on the slimmed-down growth package. The traffic light thus played the ball onto the Union’s playing field, which could now come under pressure. Because many business associations really want the growth package.

Showdown in the Federal Council

There will now be a new vote in the Federal Council on March 22nd – a showdown, so to speak. Voting takes place again here. The states must agree to the law for it to come into force. The traffic light partners called on the Union to think twice about its vote. The calculation of the SPD, Greens and FDP is: The pressure from business on the Union will be immense to agree. The Association of the Chemical Industry reported directly on Wednesday evening: “With the Growth Opportunities Act, after 15 years of tax policy regression, the federal and state governments have finally taken the first real step forward to solve the reform backlog in Germany. This opportunity has been missed.”

However, the traffic light is also taking a risk with its approach to the mediation process: If the Union remains tough and all the Union-led countries stick together and some do not deviate from the line, the relief plans could fail – given the economic downturn, this could be a fatal signal to the economy be that you can no longer rely on politics.

Source: Stern

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