High prices: Verdi threatens union protests for relief

Shortly before the crucial deliberations of the federal government on further measures in view of the high energy prices, the Verdi trade union threatened to protest across Germany if the citizens were not sufficiently relieved.

High prices: Verdi threatens union protests for relief

Shortly before the crucial deliberations of the federal government on further measures in view of the high energy prices, the Verdi trade union threatened to protest across Germany if the citizens were not sufficiently relieved.

"In order to compensate for the financial hardship caused by the energy price explosion, the state will have to spend an additional 20 to 30 billion euros this year," said Verdi boss Frank Werneke of the "Augsburger Allgemeine". Verdi is also preparing demonstrations with other trade unions and social organizations over the course of the autumn. "They will be necessary if the federal government does not sufficiently relieve the burden on the citizens."

The left and AfD have also announced that they will organize protests. Should there actually be an energy shortage in addition to the rapidly rising prices for gas and electricity in winter, some see social upheaval in Germany. The trigger for the price increases was Russia's attack on Ukraine - but support for Ukraine could crumble, it is feared, and also for the German government. The coalition therefore wants to counteract this with relief.

The Schedule

The Bundestag will discuss the budget for 2023 from Tuesday, before that there should be clarity. "We will decide on a third relief package this week," said Greens boss Ricarda Lang in the evening on the ZDF program "Maybrit Illner". The decision is to be made in a meeting of the coalition committee, which includes Chancellor Olaf Scholz (SPD), Vice-Chancellor Robert Habeck (Greens), Finance Minister Lindner and the faction and party leaders of the three traffic light partners. A specific date was not initially known.

The ideas

According to Scholz, the government "agrees to want to do something for those who earn little money". "We want to reform the housing allowance so that more people benefit from it, and we will replace Hartz IV with the new citizens' allowance at the beginning of next year," he confirmed in the "Westdeutsche Allgemeine Zeitung". "And we will do something for pensioners and students and lower taxes for many."

The Green Youth called for an energy price cap, an excess profit tax, direct payments and a continuation of the 9-euro ticket. "The traffic light must create a real rescue package for people, because time is of the essence," said the co-head of the Green youth organization, Sarah-Lee Heinrich, of the German Press Agency.

The funding

The federal government must follow up with action and finance minister Christian Lindner (FDP) give up the austerity course, demanded Heinrich. "The suspension of the debt brake in 2023 is necessary." Verdi boss Werneke also called for this. The debt brake sets strict limits on new federal borrowing.

According to leading tax estimators, the coalition can finance the third relief package primarily with additional tax revenue. From January to July, the federal government collected 16 percent more taxes than in the previous year and is therefore six percentage points higher than previously expected, said Nils Boysen-Hogrefe from the Kiel Institute for the World Economy of the Düsseldorf "Rheinische Post". In the first half of the year, sales tax alone was EUR 29 billion more than in the previous year. However, the good development in the second half of the year cannot simply be continued.

For the tax estimator of the German Institute for Economic Research, Kristina van Deuverden, there are indications that many companies have corrected their profit expectations too far because of Corona and are now paying back taxes. Her colleague Max Lay from the Munich Ifo Institute pointed out in the newspaper that government spending did not increase so much in the first half of the year due to the end of Corona aid, which could result in leeway.

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