Germany has voted - and opted for a coalition that takes climate protection as seriously as a CSU regulars' table after the third pint of beer. Anyone who has listened to the statements made by Markus Söder and Friedrich Merz over the last few days will be left shaking their heads. 1 Background on the formation of the coalition (CDU, CSU, SPD): CDU.de - Agreement for the future of our country https://www.cdu.de/aktuelles/cdu-deutschlands/einigung-fuer-die-zukunft-unseres-landes 2 Criticism of the climate policy orientation: Tagesschau.de - Conclusion of the exploratory talks: Criticism of climate targets https://www.tagesschau.de/inland/innenpolitik/abschluss-sondierungen-hintergrund-100.html 3 Söder & Merz publicly on climate policy (Analysis): Spiegel.de - Climate protection and debt package: How the money is distributed https://www.spiegel.de/wissenschaft/klimaschutz-und-schuldenpaket-so-wird-das-geld-sinnvoll-verteilt-a-0dc88004-eaf9-40c1-9433-4f03b78f9e2c
The German government is celebrating its 100 billion euro package as a milestone for climate protection. 4 CDU on the climate package in the coalition: CDU.de - Agreement for the future of our country https://www.cdu.de/aktuelles/cdu-deutschlands/einigung-fuer-die-zukunft-unseres-landes However, a closer look reveals that instead of new funds, only reallocations have been made. Originally, ten billion euros per year over ten years was planned - now it is only 8.6 billion over twelve years. The result: less money, more years and less impact in the fight against the climate crisis. 5 Critical analysis: "Greenwashing" instead of real climate investments: Foodwatch - analysing the climate package https://newsletter.foodwatch.de/ov?mailing=6BEFCV6M-GDQMJO
The local authorities, which should be investing the most in infrastructure, are faced with an absurd problem: there is not enough money to go round. When it comes to armaments/defence, they are left out in the cold, receiving only 20% of the 500 billion in special funds. Why? Because. Of the 100 billion, an average of only 800,000 euros per municipality will be left over for the next twelve years. - A sum that is at best sufficient for cosmetic repairs. 6 Municipalities receive only a fraction of the special fund: Tagesschau.de - Municipalities criticise distribution of climate package https://www.tagesschau.de/inland/innenpolitik/abschluss-sondierungen-hintergrund-100.html
Admittedly, this is black rhetoric. But it is also not easy to maintain composure while environmentally and climate-damaging subsidies for agricultural diesel and meat products are being reintroduced with the approval of the Greens instead of providing sensible tax incentives for sustainable alternatives. Commuter allowances instead of free public transport is the motto for combating climate change from 2025. 7 Subsidies for agricultural diesel and animal products are returning: Foodwatch - Environmental policy setbacks 2025 https://newsletter.foodwatch.de/ov?mailing=6BEFCV6M-GDQMJOq
e won't even be able to maintain the price of the Deutschland Ticket, according to Berlin, not even three times adjusted for inflation. This would also be a green measure that would disproportionately relieve the "lower 50%, which was an election promise of the CDU. It was probably an election promise. Just like the debt brake. Yesterday it was called the Union's DNA and we don't have a revenue problem but a spending problem; today it's water under the bridge. Call it what you like. Merz lied to his voters in order to become chancellor. It is a lie. Friedrich Merz's chancellorship is built on a lie. If only that were the only one. 8 ZDF political barometer: Majority considers Merz's course untrustworthy: ZDF - Politbarometer March 2025 https://www.zdf.de/play/magazine/politbarometer-344/250321-politbarometer-video-100
The "middle class", the "hard-working" population, weren't they the ones that the CDU/CSU wanted to relieve? 9 CDU election programme 2021 & 2025 - Goal: Relieving the burden on the middle of society
The "workers", weren't they the ones the SPD wanted to relieve? 10 SPD election programme 2021 & 2025 - Goal: Relieving the burden on low- to middle-income earners
Instead, we take from the low-income earners and give it to the super-rich. And because the debate lends itself to this and fits in with the right-wing world view of our would-be chancellor - his candidacy for chancellor has already failed twice and he has had to burnish his ego as a highly remunerated helper to the world's largest investment company (BlackRock) and simultaneously chair several supervisory boards of influential corporations - we are pitting the poorest of the poor - recipients of citizens' benefits - against asylum seekers and migrants. It's disgusting.
We have already been further.
One of the most scandalous points of the new package is the reduction in VAT on food in restaurants - a "gift" that primarily benefits large chains such as McDonald's, Burger King and Starbucks. But the millionaire star restaurateurs with their chic upmarket restaurants or Bavarian pubs, where hundreds of meat dishes from the worst factory farming are served every day, are also delighted. And they have helped them along with their bribes (satirically exaggerated, but exactly what I meant). [foootnote] CDU donation from star restaurateur Max Schlereth (Spareribs chain) https://newsletter.foodwatch.de/ov?mailing=6BEFCV6M-GDQMJO [/footnote]
While the prices of basic foodstuffs, especially non-subsidised plant-based alternatives, fruit and vegetables, but also hygiene and cosmetic products, which both rich and poor need to live, continue to rise for consumers and are now not exempt from VAT, the government is providing relief for companies that are already making massive profits.
Not taxing basic foodstuffs or at least consistently applying the reduced tax rate of 7% instead of 19% would not just have been a "left-wing green" measure.
It would have relieved the poorer half much more than the wealthy. All citizens have to buy basic foodstuffs equally. Whether you pay for it from your €2,000 salary from your job in retail or have a five-figure monthly income, the absolute price of food is the same. In percentage terms, however, low-income earners naturally spend much, much more on basic foodstuffs than the rich. For the same reason, a reduction in the tax on these basic foodstuffs is felt much more by low-income earners.
A socially just tax policy is not just an end in itself. Reducing the food costs of plant-based nutrition would enable many citizens to eat healthier and thus directly relieve the burden on the healthcare system.
Reducing VAT on basic foodstuffs would also have had another macroeconomic benefit that I miss in the political debate. As we can see, VAT offers great leverage to relieve the burden on people with low incomes. Hardly any effort, immense effect. What do people with a small purse do when there is more money to live on? They live with more money. That's understandable. Then you "afford" to go out for dinner with the family, buy a box of chocolates and even if you just give your children €5 pocket money and they use it to buy BRAVO - how much pocket money do you get these days? - The important thing is that the money is not saved. It is spent and ends up in the economy. 11 Design VAT in an ecological and social way, - Zero per cent on basic plant-based foods and public transport https://www.umweltbundesamt.de/presse/pressemitteilungen/mehrwertsteuer-oekologisch-sozial-gestalten
Have I ever mentioned that I once met Dr Sommer? The real one, the original. If that doesn't mean anything to you, you're too young. There was no internet when I was a kid. YouTube hadn't been invented for decades. No smartphones, no Apple. And we all lived and survived.
The quintessence.
The smaller the purse, the greater the proportion of tax relief that can and will be spent again directly, both as a percentage and in absolute terms.
The bigger the financial cushion, the less need there is to spend the tax savings to cover private living expenses;
the greater the motivation to save, to invest the money in high-yield capital market investments, where your own assets increase by themselves and are hardly taxed. 12 DIW Berlin: Development of the savings rate in Germany: an obstacle to the recovery in consumer demand https://www.diw.de/de/diw_01.c.450316.de/publikationen/wochenberichte/2006_40/entwicklung_der_sparquote_in_deutschland_hindernis_fuer_die_erholung_der_konsumnachfrage.html
In my case, for example, my capital assets are taxed at less than half the marginal tax rate I would have had to pay on my last tax return if I had had to pay tax on all my income as income from labour, as the vast majority of people in this country do.
