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Olaf Scholz: The Chancellor considers the planned Growth Opportunities Act to be sufficient
Photo: Ludovic Marin / AFP
Chancellor Olaf Scholz reacts cautiously to initiatives to provide tax relief for companies. On Monday in Berlin, the SPD politician referred to the already planned Growth Opportunities Act, which is intended to promote the German economy. This is a “very good project” for which a mediation process is currently underway between the Bundestag and the Bundesrat.
“I hope that this very concrete and very practical project, which is intended to make it easier for companies to invest, will become something even with the approval of the states,” said Scholz. »You should concentrate on that. It’s practical, tangible and works quickly.«
Finance Minister Christian Lindner (FDP) and Robert Habeck (Greens) had previously started a debate about the abolition of the solidarity contribution and a debt-financed investment fund.
Resistance from states and municipalities
Scholz expressed the hope that the federal states would agree to the growth opportunity package in the mediation committee, which, according to the traffic light coalition's plans, provides relief for companies amounting to seven to eight billion euros. However, Habeck had warned that the federal states could reduce the relief volume to three billion euros - which, in his words, was equivalent to a homeopathic effect.
The reason for the resistance from states and municipalities is that they would have to bear the majority of the loss of income from the planned tax relief for companies. "It is downright outrageous that of the announced seven billion euros in relief for the economy, perhaps only three billion euros or even less will now be realized," criticized the Secretary General of the Union's Economic Council, Wolfgang Steiger.
Habeck and Lindner with different ideas
With a view to the sluggish economy, both Habeck and Lindner had called for more help for companies - but expressed different ideas about it. Lindner suggested, for example, abolishing the solidarity surcharge, which would also relieve the burden on companies. However, government circles said that the volume of around twelve billion euros in the 2025 budget could hardly be financed. According to estimates, there is already a financing gap of 25 billion euros.
Habeck had proposed a loan-financed special fund for investments, but backtracked after criticism from the FDP. On Sunday on ARD he also suggested better depreciation conditions in order to quickly provide the impetus for investments in new production facilities. The main focus must be on incentives for private and public investments, said Green Party co-leader Ricarda Lang on Monday. “In my opinion, abolishing the solo would not do that,” said Lang. »Above all, that would create a deadweight effect. And I haven’t heard any proposal for counter-financing yet.”
Business associations are demanding that the government do something to stimulate the economy and do something for Germany as a business location because of international competition. The fact that both Habeck and Lindner campaigned for relief initially raised hopes that the traffic light coalition would overcome its internal blockade.
The deputy chairwoman of the SPD parliamentary group, Verena Hubertz, proposed a sovereign wealth fund for investments that would also collect private capital or money from pension funds for investments. “Not all debt is bad debt,” she said on Deutschlandfunk about ideas for reforming the debt brake so that more loans can be taken out for investments. The economic policy spokesman for the AfD parliamentary group, Leif-Erik Holm, called for tax relief for companies. In return, the government should cut spending on climate protection.
hen/dpa/Reuters