Budget crisis: DIHK warns of burdens for the economy

Energy - Budget crisis: DIHK warns of burdens for the economy

The German Chamber of Industry and Commerce has warned of burdens for the economy in the budget crisis. DIHK President Peter Adrian told the German Press Agency: "The Federal Government must strike a balance when setting the course for the budget - between keeping political promises for individual industrial projects and the agreed relief for the broad-based grid fees and electricity tax. Both are essential to safeguard the entire industrial value chain."

A focus on large-scale projects would be a danger for many medium-sized industrial companies and also for social cohesion, said Adrian. "The increase in grid fees at the turn of the year alone would cost a typical medium-sized company a six-figure sum if the promised subsidy does not materialize."

Relief for industry and SMEs questionable

The traffic light coalition is struggling to decide how much money the federal government can spend on in the coming year. The Federal Constitutional Court had declared the reallocation of 60 billion euros in the 2021 budget to the Climate and Transformation Fund null and void. The money had been approved as a coronavirus loan, but was to be used retrospectively for climate protection and modernizing the economy.

The budget negotiations between the coalition leaders are also about a federal subsidy of up to 5.5 billion euros for transmission grid fees, which was originally planned for the coming year - these fees are a component of the electricity price. The subsidy was to be financed from the Economic Stabilization Fund (WSF) - however, as a result of the budget ruling, the federal government will have to dissolve this special fund at the end of the year. The money for the subsidy would therefore now have to come from the core budget.

Prior to the budget ruling, Federal Chancellor Olaf Scholz (SPD), Finance Minister Christian Lindner (FDP) and Economics Minister Robert Habeck (Greens) had put together a package to relieve the burden on industry and SMEs in view of the high electricity prices. Among other things, the electricity tax for all manufacturing companies is to be reduced to the minimum level permitted in the EU.

Around 350 companies that are particularly exposed to international competition and are suffering from high electricity prices are to receive additional aid. The existing so-called electricity price compensation is to be extended and expanded for five years.

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1. The Federal Government's budget negotiation is crucial, as Peter Adrian from DIHK emphasizes, to balance political promises and the agreed relief for grid fees and electricity tax.
2. The German Press Agency reported the warnings from DIHK President Adrian about the potential burdens on the economy due to the budget crisis.
3. In a typical medium-sized company, the increase in grid fees alone could amount to a six-figure sum if the promised subsidy does not materialize.
4. The reallocation of 60 billion euros in the 2021 budget to the Climate and Transformation Fund was declared null and void by the Federal Constitutional Court.
5. As a result of the budget ruling, the federal government will need to dissolve the Economic Stabilization Fund (WSF) at the end of the year, affecting the subsidy for transmission grid fees.
6. The traffic light coalition is tackling how much money can be spent by the federal government in the coming year, with the budget negotiations involving a federal subsidy for transmission grid fees.
7. The network charge, a component of the electricity price, is a concern for many SMEs and industrial companies in Germany, as highlighted by Peter Adrian.
8. The Middle class in Germany may be impacted by the budget crisis, as relief for industry and SMEs, including a reduced electricity tax, is currently under consideration by the coalition leaders in Berlin.

Source: www.stern.de