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CDU leader Friedrich Merz: Does his party only agree to the withdrawal of the subsidy cut for agricultural diesel?

Photo: Michael Kappeler / picture alliance / dpa

The economy is weakening and the mood in companies is bad. What could be more obvious than to create new investments – or to provide relief – with additional tax incentives. The Growth Opportunities Act provides for exactly that, but the law is stuck in the mediation process between the federal and state governments.

18 business associations have now written a letter to the Prime Minister urgently demanding that the Growth Opportunities Act be passed as quickly as possible. “There is nothing less at stake than the rescue of German medium-sized businesses, which form 99 percent of all companies and thus the backbone of the German economy,” says the letter, which “tagesschau.de” had previously reported on.

"It's urgent, it's really a minute to twelve," said Christoph Ahlhaus, managing director of the Federal Association of Medium-Sized Businesses (BVMW). All political decision-makers should work towards its adoption as quickly as possible.

Dröge accuses Merz of blocking things

The Federal Council is blocking the Growth Opportunities Act because it leads to a loss of income for the states. The growth package provides tax relief for companies until 2028 and an acceleration of approval processes. The volume of relief in the mediation process is expected to fall from the planned seven billion euros annually to three billion euros. The Union, which has sided with the farmers in recent weeks, is also making its approval of the law dependent on a reversal of the planned abolition of agricultural diesel subsidies.

more on the subject

  • Economic weakness: Economic researchers call on the traffic light government to act

  • Budget for 2024: Bundestag decides to reduce tax subsidies for farmers

  • Farmer on agricultural diesel protests: "It's like a junkie whose substance is taken away" by Maria Marquart

The letter, which, in addition to the BVMW, was signed by, among others, the Federal Association of Taxi and Rental Cars and the Federal Association of IT SMEs, states that the existing blockage of the Growth Opportunities Act in the Federal Council and the insistence on reversing the abolition of the agricultural diesel subsidy ignore the dimension of this structural economic challenges in Germany. »This political stance does not do justice to the current structural problems at our location. Neither party tactics nor arguments within the traffic light federal government can now delay this important signal.

The leader of the Green Party in the Bundestag, Katharina Dröge, called on CDU leader Friedrich Merz to give up his blockade of the law. With his behavior, Merz is damaging the economy in a difficult phase, said Dröge. »The agreement between the federal and state governments has been reached, and the state finance ministers from the CDU and CSU have also agreed to the matter. Mr. Merz alone is relying on a blockade to raise his own profile.” That does not show a sense of responsibility or ability to govern.

Union parliamentary group vice-president Mathias Middelberg called the accusation that the Union was blocking relief for companies as “simply nonsense”. “We want much more extensive relief for businesses and small and medium-sized businesses, in particular a fundamental corporate tax reform,” said the CDU politician. These would also be financeable if the traffic light saved on citizens' money and asylum, for example.

The traffic light parties themselves minimized the Growth Opportunities Act in the process, said Middelberg. The inclusion of agricultural diesel in the negotiations is only appropriate. "Because it cannot be the case that relief for the economy as a whole is financed through new taxes at the expense of individual small industries."

apr/dpa