Berlin reneges on promise to cut record-high electricity tax
Based on facts, either observed and verified directly by the reporter, or reported and verified from knowledgeable sources.
The German government is set to maintain one of the Europe's highest electricity taxation rates, despite an electoral promise to slash it to the minimum allowed under EU law.
European rules set the minimum tax rate on power at €1 per megawatt hour. Germany charges 20 times as much, with the levy on electricity bills bringing in more than €5 billion in 2024.
The new coalition government had initially promised to slash the tax to reduce the burden on German households. Most businesses were already exempted in 2023.
However, following a political back-and-forth between the Christian Democrats and Social Democrats, the government said tax cuts were off the table until 'fiscal leeway exists.'
But with the coalition already committed taking on an extra €500 billion of government debt, a fifth of which is earmarked for the green transition, it is unclear when that moment is to be expected.
Michaela Engelmeier, head of social association SoVD, described the cancellation of the tax cut as a 'fatal signal'. Consumers needed 'tangible relief,' she told German press agency dpa .
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