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Ver.di chairman Frank Werneke at a demonstration in October 2023


Fabian Sommer / dpa

The service union Ver.di called on the federal states to vote against the Growth Opportunities Act in the mediation committee of the Bundestag and Bundesrat on Wednesday. The law leads to reduced income for the municipalities, explained Ver.di union boss Frank Werneke: "Tax breaks for companies that ultimately lead to a deterioration in the state's revenue base are a mistake."

The union emphasized that the municipalities have a key function for Germany's future viability: "All-day care, affordable housing, efficient local public transport, the integration of people who come to us - all of these tasks are carried out by the municipalities." They are a prerequisite for economic growth , prosperity and social cohesion.

Just a few days ago, 18 associations wrote a fire letter to the Prime Minister 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 make up 99 percent of all companies and therefore the backbone of the German economy," the letter said.

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.

The Bundestag has already approved the law. However, the states had stopped it in the Federal Council because, in their view, the planned tax relief would tear too big a hole in their budgets and those of the municipalities. The mediation committee of the Bundestag and Bundesrat is scheduled to deal with the law on Wednesday.