Growth Opportunities Act is coming
The Union is probably giving up its blockade in the Federal Council
March 12, 2024, 4:13 p.m
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It should work on the second attempt: The Growth Opportunities Act will probably pass the Federal Council in ten days. The way was apparently paved by the farmers, who were willing to compromise. This also makes the Union’s blockade stance invalid. However, one thing still needs to be clarified first.
The Federal Council will most likely approve the planned tax relief for companies next week. This emerges from the internal preliminary specifications of several federal states. Accordingly, after the failure of the Growth Opportunities Act in the Mediation Committee, the Union-led countries in particular should agree to the compromise presented. This stipulates that the traffic light government’s tax relief package will only amount to a good three billion euros instead of a volume of more than seven billion euros. “However, the federal government still has to indicate how it wants to relieve the burden on agriculture before the vote on March 22nd,” said a person involved in the negotiations.
The Growth Opportunities Act provides for a number of individual measures such as improved depreciation options for companies. It failed in the Federal Council at the end of 2023 because some federal states insisted on the simultaneous withdrawal of the subsidy cut for agricultural diesel. The mediation committee therefore did not approve the slimmed-down compromise proposal.
The states had previously implemented the severe cuts because they and the municipalities were supposed to bear the majority of the tax losses. “The federal government is now only responsible for 1.3 billion euros of the 3.2 billion euros,” criticized the parliamentary managing director of the CDU/CSU parliamentary group, Thorsten Frei.
Union criticized for blockade stance
After the farmers’ protests, the traffic light coalition made up of the SPD, Greens and FDP promised that they would resolve relief for agriculture by the summer in parallel with the reduction in subsidies for agricultural diesel. At the weekend, the German Farmers’ Association signaled its willingness to compromise for the first time, saying that it would also agree to compensation for the additional burden on agricultural diesel.
The federal government should “either forego this tax increase or at least make compensation of the same volume elsewhere,” said CDU politician Frei. SPD parliamentary group deputy Mathias Miersch had indicated that the traffic lights could provide information about relief before the Federal Council meeting.
The Union was recently criticized by business associations for its resistance to the Growth Opportunities Act. Frei rejected the criticism. There are 250,000 small and medium-sized businesses in the agricultural sector. That’s why it’s nonsense to try to relieve them and burden them at the same time.