The economy is slowing down, politics continues to argue: In the Bundestag, Economics Minister Habeck called for an end to the Union blockade of the “Growth Opportunities Act”. BDI and medium-sized companies also want that. But the Union remains no.
Federal Economics Minister Robert Habeck has called on the Union to end the blockade on the growth package. “Listen to the business associations and finally give the ‘Growth Opportunities Act’ the green light,” said the Green politician in the Bundestag.
Union relies on resistance
But it doesn’t look like that at the moment: The Union wants to stick with its no even after the meeting in the mediation committee, which split up without agreement. CSU regional group leader Alexander Dobrindt made it a condition for approval that the traffic light would withdraw its cuts to agriculture. Bavaria’s Prime Minister Markus Söder also does not want to vote for the “Growth Opportunities Act” in a vote in the Bundesrat. Söder complained that there was no accommodation in the dispute over agricultural diesel. Bavaria will reject the package in this form. “I am particularly disappointed with my SPD colleagues who have been very open in their support for agriculture at demonstrations and have now simply backed out when things get serious.”
Hesse’s CDU Prime Minister Boris Rhein said that the traffic light government’s “path of relieving the burden on one part of the economy by putting a burden on another part – agriculture” was wrong. The “Growth Opportunities Act” must therefore be “expanded to include a relief package for our farmers,” Rhein told the Funke newspapers.
In order to pass the law, the traffic light coalition in the state chamber relies on votes from Union-led states. Voting is scheduled to take place there on March 22nd.
Habeck: Union is pursuing “voodoo financial policy”
During the debate on the annual economic report in the Bundestag, Economics Minister Habeck criticized the fact that the Union’s proposals for more growth would result in tax losses of 45 to 50 billion euros in the budget – but the Union has no concepts for counter-financing and at the same time wants to comply with the debt brake. This is “voodoo financial policy”.
The federal government is only expecting mini-growth of 0.2 percent this year. Habeck again pointed to weak global trade as the reason for the crisis. This is putting a strain on the German economy, which has strong exports.
CSU regional group leader Dobrindt spoke of an “economic policy declaration of bankruptcy by the traffic light government”. “That’s not how you fight a recession, that’s how you create a depression in the country,” he said in the Bundestag.
Sharp criticism also from business
For the economy, the dispute over new aid for growth is incomprehensible. “The signal effect is simply catastrophic,” said the President of the Federation of German Industries (BDI), Siegfried Russwurm Deutschlandfunk.
The BDI President cannot understand the link between economic aid and cuts in agriculture and called it “a very difficult argument.” It also cannot be the case that companies in Germany pay around a third more taxes than in other EU countries. Russwurm is also critical of the level of planned support: “The law has become a law, no: a draft law.” The negotiating partners in the Mediation Committee had halved the originally planned volume of relief in the Growth Opportunities Act because the states did not want to bear the costs.
The SME association also criticized the ongoing blockade by the opposition camp for economic development as a “devastating signal”. Companies from different industries would be played off against each other. Important tax relief for companies, which is urgently needed right now, would be completely at risk. The middle class should not be taken hostage by politics. “It is a farce when politicians agree that growth-promoting measures are now needed, but many countries still block even small tax relief,” said Ludwig Veltmann, general manager of the SME association.