Inflation continues to eat its way into German wallets. But while the Germans feel the inflation more and more every day, the traffic light gets tangled up in arguments. And instead of further relief, low and normal earners will have to expect even more taxes in the future. There has been massive criticism from the opposition.
It was only a few weeks ago that the SPD made a public U-turn of a kind not seen every day in politics. After the lost state elections in North Rhine-Westphalia, the comrades took stock. The finding: the party talks too much about weapons and not enough about inflation. SPD leader Lars Klingbeil admitted that the key issue of price increases had “not been adequately addressed”. The conclusion from the election result: “This is a clear signal to the SPD to take this issue more into account.”
Weeks later, the federal government was actually more concerned with the question of how to counteract inflation and rising prices and further relieve the Germans. There has been a lot of talk, both publicly and behind the scenes, about the possibilities. But the result is sobering: Finance Minister Christian Lindner (FDP) has long since made it clear that he no longer sees any scope for costly relief. The money tap should remain. And now?
Actually, before the parliamentary summer break, i.e. this week, further relief should be decided. That’s what the SPD parliamentary group leader Rolf Mützenich had announced. But in all likelihood nothing will come of it. A project that is running out of time.
The core problem: While the Germans notice the inflation in their wallets every day, the traffic light gets tangled up in arguments. The Greens and SPD are calling for more financial leeway and are making compliance with the debt brake for 2023 up for grabs: “The crucial question is not whether we will suspend the debt brake come hell or not, but whether we will meet the challenges of our time,” says the Green party leader Ricarda Lang.
But there is a third coalition partner. And FDP boss Lindner doesn’t see it that way at all. So the traffic light has to think about other ways and means to relieve the burden on citizens (beyond the previous packages).
On Monday there was a “concerted action” on the subject, in which Chancellor Scholz and Finance Minister Lindner, among others, spoke to union representatives and employers about possible further relief. However, concrete solutions and corresponding measures could be months away.
Meanwhile, prices continue to rise, and the burden on citizens increases. And to top it all off, it looks as if social security contributions will rise to over 40 percent in the future – an additional burden that will be particularly noticeable for those on low and medium incomes. Whether and how this can be counteracted – there have been no concrete proposals so far.
There is therefore criticism from the Union. “Focusing on social issues during the election campaign, preaching ‘respect’ and then burdening the socially disadvantaged of all people is hypocritical. Accordingly, it is not surprising that the SPD gets the receipt from the voters in the polls,” says CSU regional group leader Alexander Dobrindt to FOCUS Online.
The CDU parliamentary group leader and former Health Minister Jens Spahn also warns: “In times of record inflation, all of Germany is discussing how we can relieve small and medium-sized incomes.” At the same time, the federal government is planning for 2023 for the first time in decades with social security contributions of over 40 percent. “That means less net from the gross for tens of millions of low and normal earners. This inconsistency is fatal in the current situation, “said Spahn to FOCUS Online.
The CDU politician demands for this: The government must now relieve small and medium-sized incomes from income tax so that more of the net remains from the gross. “In addition, the electricity tax should be reduced and consumer relief should be combined with incentives: if you save gas compared to last year, you get money for the amount saved.”
The first politicians are also expressing concern from the traffic lights. Scholz does not give the impression that he wants to address this week, say several traffic light deputies. That would mean that the debate on new relief would be pushed to the autumn. That would suit the FDP, which is reluctant to talk about where money is still needed.
Scholz warned on Monday that Germany was facing a “historic challenge”. SPD leader Klingbeil spoke of “dramatic months”. The federal government and especially the SPD may now be threatened with corona deja vu. Because in 2020 there were always warnings about the fall, but the grand coalition only acted when it was far too late.
