Morning Briefing: Immerhin eine Energie, die der Staat nicht besteuert

Good morning, esteemed readers, the German federal government is attempting to achieve a budget reconciliation during this Thursday's budgeting session through a compromise that entails neither cutting the energy tax nor introducing two new taxes. The electricity tax will remain unchanged, contrary to Chancellor Friedrich Merz's (CDU) promise.

Additionally, the planned taxes on sugar and plastic are not being implemented, at least not in the short term. This was revealed by the three faction leaders - Thorsten Frei (CDU), Alexander Hoffmann (CSU), and Matthias Miersch (SPD) - following separate faction meetings last night. If the agreement holds, a reasonably functional federal budget for 2027 could be made possible.

However, it's not that the coalition government can agree on nothing. The issue is that instead of generating actual savings, it's more of a zero-sum game. Politically, it's a classic coalition deadlock. The chancellor doesn't get his promised reduction in the electricity tax, and the vice chancellor doesn't get his sugar tax. For ordinary citizens, financially, there's hardly any change: a reduction in the electricity tax would have brought roughly 80 euros annually per household, money that is now being spent instead on new taxes on sweets or plastic.

Only the finance minister has to account for the bill. The electricity tax reduction would have created a five-billion-euro gap in the budget, while the sugar tax would have brought about 700 million euros, the plastic tax about 1.5 billion euros.