Economic reform push
Habeck calls for tax relief and incentives for companies
Status: 03.02.2024 | Reading time: 3 minutes
There will be no reform without an agreement between Finance Minister Christian Lindner (left) and Economics Minister Robert Habeck
Those: picture alliance/dpa/Britta Pedersen
Economics Minister Robert Habeck is pushing for corporate tax reform to strengthen Germany’s competitiveness. Finance Minister Christian Lindner sees his coalition partner’s move without consultation as an unusual process – and prefers to speak of an “economic turnaround”. But what does that mean?
Federal Economics Minister Robert Habeck (Greens) is in favor of corporate tax reform. “I also see that overall we have corporate taxation that is no longer internationally competitive and investment-friendly enough,” he told WELT AM SONNTAG. “That’s exactly why we should think about how, for example, we finance tax relief and tax incentives for investments in the future in order to really unleash the forces.” Unfortunately, there is “extremely narrow financial leeway” at the federal, state and local governments. “And yes, we will certainly have to make savings, including in the 2025 budget,” said the minister.
Habeck was responding to criticism from Finance Minister Christian Lindner (FDP) of his proposal on Thursday to create a special fund to relieve companies. Habeck’s suggestion had not been agreed upon: “The idea was surprising in every respect,” Lindner told WELT AM SONNTAG. “The Minister of Economic Affairs is saying that he is dissatisfied with the federal government’s existing economic policy and that he believes something completely different is necessary.” This is “an unusual process”.
Lindner replied that he also believed an “economic turnaround” was necessary and was prepared to accept the offer for discussion: “However, I am not convinced by the specific proposal to incur hundreds of billions of euros in debt in order to pay subsidies on credit. In this way we would deform the social market economy.” Lindner suggested a “dynamization package”. These included more flexibility in the labor market and the reduction of bureaucracy. In addition: “We should expand the tax incentives in the Growth Opportunities Act for investments and research towards a corporate tax reform,” said the Finance Minister.
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“I agree with Christian Lindner: We have to do more for growth and economic dynamism,” said Habeck on Saturday. “I am therefore happy to work with Christian Lindner on a dynamization package.” He has just introduced suggestions for this into “joint government work”.
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However, Habeck refuses to save on citizens’ money to finance it. There is little financial leeway, “but if we really want to develop force to keep up with the USA, we can’t do it with a zero round of citizen’s money.” Habeck is alluding to the fact that Lindner is calling for citizen’s money not to be increased at the end of 2024.
With his willingness to implement a tax reform, Habeck is responding to the demands of many business representatives. “As necessary as it is to think intensively about improving the framework conditions for investments in our country and, above all, to bring about this through politics: our clear priority is a better investment and growth climate through corporate taxes that are once again based on a European and “We must be lowered to the usual international level, from which we are currently far away,” said the managing director of the Federation of German Industries (BDI), Tanja Gönner, to WELT AM SONNTAG.
The general manager of the employers’ association BDA, Steffen Kampeter, rejected a special fund in the newspaper. “A two-thirds majority is currently not evident. “The Minister of Economic Affairs should therefore focus on his core competence and improve the framework conditions for the German economy with a simple majority in the Bundestag,” he said. “The recession has no time for diversionary tactics.”
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