German budget blocked again, leaving subsidy feud with farmers unresolved

German budget blocked again, leaving subsidy feud with farmers unresolved | INFBusiness.com

Germany’s largest opposition party, the conservative CDU, blocked a decisive vote on parts of the annual budget scheduled for Friday (2 February), leaving unresolved the feud over agricultural subsidies that had led to mass protests of farmers in recent weeks.

Originally, it was planned that the budget for 2024 including would pass the Bundestag and the Bundesrat, Germany’s upper chamber, on the same day. However, while the Bundestag voted in favour of the bill, the Bundesrat decided to postpone a vote on parts that included cuts to agricultural fuel subsidies due to the CDU’s intervention. 

Speaking in the Bundestag, Helge Braun, the CDU leader of the Bundestag’s budget committee, explicitly linked his party’s blockade to the axed subsidies.

“If you agreed to our motion [to reverse the agricultural fuel cuts], we would be on a good way for the budget to see the light of the day,” he told MPs on Friday.

Parallel to similar protests all over Europe, German farmers had taken to the streets in recent weeks to protest the cuts, which the government used to plug a gap in the budget caused by a court ruling on its funding.

German budget blocked again, leaving subsidy feud with farmers unresolved | INFBusiness.com

Germany delays 2024 budget after court ruling shakes government

The German parliament’s budget committee has delayed a meeting originally set for Thursday (23 November) to finalise the 2024 budget, following a court ruling that cancels €60 billion off a climate fund and could have broader implications for other public spending.

The mass protests culminated when about 30,000 farmers and 5,000 tractors gathered in Berlin in mid-January.

Since the next sitting of the Bundesrat is scheduled for 22 March, an official conclusion to the feud between the government and the farmers could drag on for almost two more months. Moreover, the Bundesrat could still call in a mediation process that would further delay a final decision.

Farmer representatives used the news to resume the pressure on the government.

“The time gained must now be used sensibly,” Joachim Rukwied, the president of the German Farmers’ Association (DBV), the most influential agricultural association in Germany, said on Thursday.

He reiterated his call for the cuts to “be taken off the table”.

Farmer momentum fizzling out

However, while the CDU has used the final chance to expose the ruling coalition’s gaffe-heavy budget process, the momentum for a U-turn on the policy forced by public pressure appears to have somewhat fizzled out.

“The media’s attention carried the farmers’ protests, and it is now waning,” Thomas König, a political scientist at the University of Mannheim, told Euractiv.

Protests peaked in mid-January with the rally in Berlin and have been increasingly regionalised since. Farmers’ associations entered negotiations and managed to elicit mild concessions but failed to force a complete withdrawal of the cuts.

The concessions include phasing the cuts out over two years, “which reduces the immediate burden and thus also the urgency for farmers”, König said.

However, he noted that a decision on subsidy cuts does not go to the heart of the problem that many farmers are facing, namely “the high level of regulation and bureaucracy” – an increasingly common refrain across the EU.

In response to the protests, the government has previously promised to cut red tape and reinforce farmers’ price bargaining positions vis-à-vis food retailers.

“There is indeed far too much bureaucracy,” Chancellor Olaf Scholz (SPD, S&D) told the ‘Green Week’ agricultural convention last week, while Agriculture Minister Cem Özdemir (Greens) promised to take on “market power” of supermarkets.

Still, there has been “no concrete plan” so far, only “buzzwords”, as König observed.

However, he did not see sufficient basis for the protests to grow into a wider political movement, as has partially happened in the Netherlands.

“The sector is too heterogeneous and there are too many conflicts of interest [between smaller and larger operations],” he said.

(Edited by Oliver Noyan/Zoran Radosavljevic]

Read more with Euractiv

German budget blocked again, leaving subsidy feud with farmers unresolved | INFBusiness.com

Farmers’ discontent as a stress test for the EU single marketLast week, Spanish lorries full of fruit, vegetables, wine and ham were dumped by French farmers during blockades in south-east France and Brittany. The row continued this Tuesday.

Source: euractiv.com

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