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The German government presents austerity measures

2024-01-10 10:23:00, Kosova & Bota CNA

The German government has reached an agreement on additional austerity measures to reduce the burden on the federal budget for 2024. The budget financing bill, among other things, includes the controversial reduction of oil subsidies for farmers, higher taxes on air traffic and stricter sanctions in the field of social assistance for the unemployed.

These austerity measures are necessary because, according to a previous decision of the Constitutional Court, the government must compensate for a financial shortfall of around 30 billion euros in the basic budget, as well as in the climate and transformation fund.

Despite protests, oil subsidies for farmers are removed

Air ticket taxes will increase from May. Depending on the final destination of the trip, tickets should increase by almost a fifth - to 15.53 to 70.83 euros per passenger. Ticket tax will be charged for all passengers departing from German airports. The additional fees will have to be paid by the airlines, but they will be able to pass these taxes on to passengers. Based on this, the government in Berlin this year expects an additional income of about 400 million euros.

The government also stood by the decision on the very controversial reduction of subsidies in the agricultural sector - despite farmers' protests. We are talking about the gradual removal of tax incentives for oil. "It is a special contribution to reducing climate-damaging subsidies," the government's draft says. Until now, farmers have been able to receive a partial refund of the energy tax on oil, with compensation of 21.48 cents per liter.

Germany's ruling coalition originally planned to immediately and completely cut this aid, which has been provided since 1951. Affected farmers and companies in the agrarian sector have now been given more time to adjust. This year, the subsidy rate will be reduced by 40 percent, and in 2025 and 2026 by an additional 30 percent. From 2026, these subsidies should no longer exist.

Green light for cutting social benefits

The cabinet also gave the green light to the planned reduction of social assistance for the unemployed, the so-called "Bürgergeld". In the future, the employment offices (Jobcenter) will be able to completely cancel for two months, the assistance for unemployed persons who refuse with persistence the jobs offered.

It is expected that this regulation will bring savings of about 170 million euros per year - 150 million for the federal government and 20 million for the municipalities. At the same time, housing and heating aid should not be removed.

In addition, the so-called social assistance bonus of 75 euros per month, which was introduced for the further training of the unemployed, will be removed. It is expected that this will bring additional savings of 100 million euros. Training aimed at obtaining a professional diploma will continue to be supported with 150 euros per month.

Decision on the budget probably in January

After the government took a decision on austerity measures, the German parliament is now on the move. The government expects the budget to be approved first in January in the Bundestag and then in the February 2nd session in the Bundesrat. Until then, the so-called temporary budget management is in force./ DW