Scholz invokes cohesion: The coalition committee has agreed on a third relief package

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Aid totaling 65 billion euros: The coalition committee has agreed on a third relief package. Among other things, child benefits are to be increased

In view of the high energy prices, the traffic light coalition has agreed on a third relief package. The details were presented at a press conference this morning. According to the resolution paper, the package has a total volume of 65 billion euros.

“Our country is facing a difficult time,” said Chancellor Olaf Scholz (SPD). “We will not leave anyone alone.” And, “We will get through this winter.”

The third relief package is now bigger than the first two combined, the chancellor stressed. All the packages together represent a volume of 95 billion euros, he said. “That’s a lot to move. It is necessary.”

Students are to receive a one-time payment of 200 euros, pensioners 300 euros. The targeted measures “relieve the burden on all households – including pensioners, students, technical students and trainees,” the paper says.

The coalition has also agreed on a successor to the 9-euro ticket. The price of the ticket has not yet been finalized. The goal is a price range between 49 and 69 euros a month, the resolution paper says. The states still have to agree to the financing.

“The federal government is prepared to provide an additional 1.5 billion euros annually to the states for a nationwide local transport ticket if the states provide at least the same amount,” the paper says. “The transport ministers of the federal and state governments will promptly develop a joint concept for a subscription ticket that can be used nationwide and booked digitally.”

Traffic light wants to reform European electricity market – and introduce electricity price brake

In order to relieve citizens in view of the high electricity prices, the German government wants to push for a reform of the electricity market in the EU. So-called windfall profits from currently particularly profitable energy producers are to be skimmed off – this currently means producers of renewable energies and coal and nuclear power. However, the coalition partners are also prepared to skim off these windfall profits at the national level, Scholz said on Sunday.

“If the electricity market measures currently under discussion in Europe cannot be agreed and implemented in a timely manner, the German government will implement these adjustments in the electricity market design itself to relieve the burden on consumers,” the paper said.

By skimming off these profits, the federal government intends to finance an electricity price brake. “Private households can thus be credited with a certain amount of electricity at a discounted price (basic consumption),” it says. This relieves private households and at the same time maintains the incentive to save energy.

Child benefit and citizen’s allowance to be increased

With the planned introduction of the citizen’s income at the beginning of next year, the SPD, Greens and FDP also want to increase the standard rates for those in need to around 500 euros. Today, single people on basic benefits receive 449 euros per month. Child benefits are also to rise significantly – by 18 euros a month for the first and second child at the start of the year.

The home office allowance is to be “de-funded and improved”. A deduction of five euros per home office day is possible for income tax purposes, up to a maximum of 600 euros per year. A tax deduction is also possible if a family does not have an apartment with a separate study.

Scholz also announced a major housing allowance reform. It is intended to help those who have only a small income or no income at all: In the future, two million people are to be entitled to housing benefit instead of only 640,000 as at present. The housing benefit will also include a permanent climate component and a permanent heating cost component to cushion rising energy prices more strongly.

No additional new debt

Finance Minister Christian Lindner (FDP) wants to finance the relief package without additional new borrowing. Around 32 billion euros could be mobilized for the relief in the 2022 and 2023 federal budgets. The development of revenues and the “provisions already made for 2023” would allow this. In addition, there would then be the planned skimming of profits from energy companies, which Lindner put at a double-digit billion amount.

The total volume of 65 billion euros mentioned by the coalition for the package is more of a “conservative estimate,” Lindner said. “We may even be above that, depending on developments.”

Negotiations into the night

Scholz, Lindner and Vice Chancellor Robert Habeck had been negotiating with the party and parliamentary group leaders of all coalition partners in the Chancellor’s Office since midday on Saturday. The negotiations apparently dragged on into the night. Chancellery chief Wolfgang Schmidt (SPD) tweeted Sunday morning, “Sleep is overrated…”

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