Rising fuel prices fuel German ecotax row

Opinion poll shows majority opposed to fuel taxes, opposition parties step up the fight

Nearly two-thirds of Germans oppose the country's fuel tax escalator, an opinion poll published yesterday concluded. The finding has poured further flames on a political row that has reached boiling point since late May. Some observers are claiming that the argument could threaten the chances of the red/green coalition government serving a second term.

Carried out for a Hamburg newspaper by research organisation Forsa, the poll found that 61% of a sample of voters wanted the programme of annually rising petrol and diesel prices scrapped. Conservative and FDP (Liberal) sympathisers were even more against. Only 45% of SPD voters wanted to keep the programme, and backers of the minority Green party are isolated in their strong support of the policy.

The row is taking place as prices at the pump climb to record levels. In addition to the fuel tax escalator, the rise has been caused by a surge in world oil prices since the beginning of the year and the 20% plunge in the value of the euro against the US dollar, in which world oil prices are quoted.

While the government blames the oil industry, Chancellor Schröder's opponents are not missing any opportunities to attack the taxes, which are increasing fuel prices by euros 0.03 (DM0.06) per litre a year (ENDS Daily 26 August 1999). A German transport expert told ENDS Daily that about one-quarter of the increase in German road fuel prices over the last two years could be blamed on ecotaxes.

A respected national economics institute, the RIW, said this week that dropping next year's fuel price hike would prevent the creation of around half a million new jobs. In contrast, Edmund Stoiber, president of Bavaria, said the existing policy was threatening the car industry, upon which 5m Germans depend for their livelihood.

The row looks unlikely to die down soon. Yesterday in parliament the FDP introduced a motion to get abolish the programme and bring in what the party called "a real ecological tax reform" instead. Meanwhile, the state of Baden Württemburg is to introduce a parliamentary motion on Friday proposing that the ecotax is scrapped. The Conservative CDU party is also campaigning for an end to the ecotax "in its present form" and replacement by a "common system of European ecological taxes".

Follow Up:
Die Woche, tel: +49 40 301 810, and opinion poll results.

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