Federal Chancellor Friedrich Merz stood by his goal of reducing the electricity tax to the European minimum rate for everyone in 2027. On the sidelines of a meeting in Dublin the CDU leader said he wanted the full reduction to take effect next year. However, how it will be funded remains unclear: the draft 2027 federal budget does not yet include the required amount.
The Budget Committee of the Bundestag concluded its deliberations on the budget on 13 November. According to Tagesschau, around €5.4 billion is missing for the general electricity tax cut. The budget has therefore not yet been finally approved; the Bundestag’s final deliberations Bundestag are scheduled for 24 to 27 November.
Merz wants to raise the issue on 17 November at the coalition committee There, representatives of the governing parties CDU, CSU and SPD will meet. Federal Finance Minister Lars Klingbeil from the SPD was broadly open to a reduction, according to the dpa news agency, but called for sound offsetting measures. No agreement had yet been reached on how these would be designed.
The electricity tax cut is set out in the coalition agreement. The tax has already been reduced to the European minimum rate for manufacturing, agriculture and forestry. Extending the cut would also cover private households and other businesses. The extent of their savings would depend, among other things, on how much electricity they use.
For the government, this raises both a budgetary and a political question. A lower tax would reduce federal revenue; the coalition would have to decide how to make up the shortfall. At the same time, Merz had publicly promised the relief. The fact that the draft budget initially includes no funding for it has therefore also drawn criticism within the Union.
The CDU’s budget spokesman Mathias Middelberg warned that political promises must be kept. SPD parliamentary group leader Matthias Miersch said on 12 November that he could not yet see any room to offset the cost. He estimated that an average family might save eight to nine euros a month, while also pointing to expected tax revenue losses.
It remains unclear whether the coalition can still include the measure in the budget. Green Party budget spokesman Sebastian Schäfer said, according to Tagesschau, that a motion in the Bundestag plenary could still be possible after the committee’s deliberations had concluded, but described such a move as highly unusual. It would not, however, take the place of a political agreement.
The dispute goes beyond the specific tax: the budget plan provides for high spending and substantial borrowing. Any additional relief would have to compete with other measures within that framework. Merz’s statement on 13 November therefore restates a goal; it is not yet an approved tax cut.
Editor: Phillipe Schmidt-Araguin (Article created with AI assistance).