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Prices at a petrol station in Lower Saxony at the end of October: "An early political solution is important"

Photo: Sina Schuldt / dpa

The German government has still not been able to agree on how to plug the billion-euro hole that a ruling by the Federal Constitutional Court tore in the budget in mid-November. The head of the Economic Wise Men, Monika Schnitzer, is therefore proposing as a cost-cutting measure to abolish "climate-damaging diesel subsidies", i.e. the tax advantage for diesel. In order to save the necessary billions, all coalition partners will have to make concessions," Schnitzer told Düsseldorf's Rheinische Post on Saturday. An early political solution is important to reduce uncertainty in the economy and the population."

A complete abolition of the so-called diesel privilege could bring the federal government additional revenues of 8.5 billion euros per year. This is the result of a recent study by the Forum for an Ecological-Social Market Economy (FÖS). If diesel were taxed at the same rate as the energy content of petrol, the tax rate would rise from 47 to 76 cents per litre. This, in turn, would probably result in a corresponding price increase of almost 30 cents per litre of diesel at petrol stations, which is likely to be politically controversial.

Plea for suspension of the debt brake

Economist Monika Schnitzer is also calling for a renewed examination of the question of whether the debt brake can be suspended again in 2024. "The effects of the crises are still having an impact and in order to overcome them, investments in the faster expansion of the energy infrastructure are necessary," stressed Schnitzer, who chairs the German Council of Economic Experts.

In an interview with SPIEGEL, Schnitzer had already spoken out in favor of a more far-reaching, fundamental reform of the debt brake "that would enable investments in the future. We have to leave something for the next generation."

The economist Achim Truger also campaigned in the »Rheinische Post« for the renewed suspension of the debt brake. » The use of the exemption rule is economically justified, because the economy is still severely affected by the energy crisis and the federal budget is affected by Ukraine aid and costs for refugees," Truger argued. Cuts are the wrong way to go. "The economy is on the brink of collapse, which could ruin it and destroy the recovery," warned Truger. He also spoke out in favour of the dismantling of the diesel privilege and a "temporary climate soli for high incomes".

Chancellor Olaf Scholz (SPD), Economics Minister Robert Habeck (Greens) and Finance Minister Christian Linder (FDP) have been wrestling for days to find ways to plug a financial hole of 17 billion euros in the 2024 budget.