🥇 First rule of investing? Know when to save! Up to 55% off InvestingPro before BLACK FRIDAYCLAIM SALE

German budget consensus under fire over EVs, agricultural diesel

Published 17/12/2023, 18:22
© Reuters.

BERLIN (Reuters) - Germany's government faced calls on Sunday to help farmers and car buyers by revisiting cuts forced upon it by a court ruling which blew a 60 billion euro ($65 billion) hole in its budget.

A coalition move to end subsidies for agricultural diesel drew criticism from Green lawmaker and agriculture minister Cem Ozdemir and from legislators belonging to Finance Minister Christian Lindner's business-friendly Liberals.

Opposition conservatives and Chancellor Olaf Scholz's Social Democrats also criticised the decision to end, with no prior warning, a programme that paid subsidies to buyers of new electric vehicles, with critics saying the move would hit German carmakers already struggling with Chinese and U.S. competition.

The criticism highlights the political cost imposed on an already fractious coalition by the Constitutional Court ruling, which dented the 2023 budget and delayed by weeks an agreement on a budget for next year.

With limited financial leeway, the three coalition parties, constrained by differing views on fiscal rectitude and government spending needs, took weeks to agree a replacement.

In an interview on Sunday, Finance Minister Christian Lindner ruled out revisiting the end to the electric vehicle subsidy, which has paid out some 10 billion euros since 2016.

"There was never a fixed end date," he said, adding that the programme was only ever expected to run until the money ran out.

He was, however, more sympathetic on the matter of agricultural subsidies.

Ozdemir earlier said the only alternative to keeping the subsidy for agricultural diesel was closing farms. The agriculture minister will himself speak at a farmers' protest demonstration in Berlin on Monday.

© Reuters. FILE PHOTO: A parking sign for electric vehicles is pictured, where U.S. electric vehicle pioneer Tesla announced to build its first European factory and design center near Berlin, in Gruenheide, Germany, November 13, 2019. REUTERS/Hannibal Hanschke/File Photo

"Car drivers can switch to electric but heavy agricultural machinery can't do that yet," he said. "And we have to eat."

($1 = 0.9179 euros)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.