German government outlines savings measures, subsidy cuts for farmers

Admin I Monday, Jan. 08, 2024

BERLIN – The German government has launched several measures from its 2024 budget savings package, including highly controversial subsidy cuts for the agricultural industry.

The Cabinet approved a draft bill on Monday, which the coalition parties can now introduce in parliament, dpa learned.

In December, the coalition agreed on savings in the 2024 budget after lengthy negotiations, following a landmark ruling by Germany’s top court that sent original budget plans into disarray.

The ruling left a financial gap of around €30 billion ($32.3 billion).

Measures include a higher ticket tax for air travel from May onwards.

Depending on the final destination of the journey, it is set to rise by almost a fifth to between €15.53 and €70.83 per passenger.

The ticket tax affects all passengers taking off from German airports. The airlines have to pay the surcharges. However, they can pass this on to passengers.

The government expects the higher tax rates to generate additional revenue of around €400 million this year.

The Cabinet also initiated highly controversial subsidy cuts for farmers, despite nationwide demonstrations on Monday that kicked off a week of protests.

The tax cuts for agricultural diesel are to be gradually abolished, the coalition decided.

“In particular, this represents a contribution to the reduction of climate-damaging subsidies,” the draft states.

The fuel subsidy currently allows farmers to buy agricultural diesel at a tax rate of 25.56 cents per litre compared to the full rate of 47.04 cents.

The Cabinet also gave the green light for the planned tightening of unemployment benefits.

According to the draft, job centres are to be able to completely cancel benefits for the unemployed for a maximum of two months if those affected persistently refuse to take up work.

“The possibility of taking up work must actually and directly exist and be wilfully refused,” the draft states.