German ecotax programme to run its course

Opposition parties fail to overturn government's five-year tax esclator in parliamentary vote

Germany's main opposition parties yesterday failed in an attempt to prevent two further scheduled increases in energy taxes under the government's going ahead in 2002 and 2003. Proposals first tabled by the CDU (conservative) and FDP (liberal) parties last summer were defeated by the governing majority in a plenary vote in the lower parliamentary house, the Bundestag.

A flagship policy of the Red/Green governing coalition since it took power in 1998, the ecological tax reform involves energy tax increases in five steps from 1999 to 2003. Employment charges are being reduced as taxes on motor fuels, heating oil and electricity are raised, with the aim of shifting the burden of taxation from "goods" to "bads".

Opposition parties stepped up their attacks on the ecological tax reform programme last year and harshly criticised the third round of tax rises, which took effect on 1 January (ENDS Daily 3 January). They could still stop the final scheduled increase if the current government fails to win national elections due in 2002. Chancellor Gerhard Schröder recently sought to defuse hostility to the programme by saying that further tax rises after 2003 were unlikely (ENDS Daily 13 February).

Follow Up:
German Bundestag, tel: +49 30 2270.

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