Had Germany’s coalition government existed in 16th century Verona to mediate between the hostile Montague and Capulet families, the tragedy of Romeo and Juliet might have found a happy ending. The modern-day ‘traffic light’ trio has found an easy way to resolve feuds, without anyone having to move much from their position.
In fair Berlin, where we lay our scene, an illustrative example of the government’s crafty technique was provided this past weekend by the third “relief package.”
To help Germans face soaring energy and living costs, the three coalition partners – Social Democrats (SDP), Greens, and Liberals (FDP) – agreed to the bundle of measures on Saturday night.
One of the major announcements made by a tired Chancellor Olaf Scholz (SPD) on Sunday morning was this: “We have committed ourselves to changing the [electricity] market organisation in a way where random profits do not come up any longer or are levied.”
If the statement leaves you scratching your head over whether or not what Scholz described constitutes a windfall tax on the electricity market, this is no coincidence.
Even after a sleepless night, Scholz’s carefully selected words hold the key to how the three traffic light parties were able to overcome their differences. By describing the decision in terms as vague as possible, the chancellor left room for everybody to interpret the agreement in whatever way suits them best.
Calls to implement a windfall tax have risen in volume in the German and European public debate as soaring gas prices drive up electricity bills. Producers of, say, solar or wind energy have thus been able to profit from a combination of low costs and high retail prices, gaining what many class as windfall profits.
While Scholz’s Social Democrats, as well as the Greens, came out strongly in favour of a windfall tax to finance support measures for households struggling with rising costs, the Liberals had so far stood in the way of levying windfalls to keep one of their main promises made during last year’s election campaign: not to introduce any new taxes.
What this weekend’s agreement achieves, with a semantic sleight of hand, is to reflect both sides – diametrically opposed – simultaneously.
On one side, by speaking of “levying random profits” rather than implementing a windfall tax, the business-friendly FDP gets to tell their electorate, being technically correct: This is not a tax.
Finance Minister Christian Lindner, the Liberal party chief, for instance, clapped back at those calling the new measure a windfall tax via Twitter.
“Unfortunately, a misinterpretation,” he wrote, arguing that the step taken by the government was instead a “correction of the rules policy-makers had made for the energy sector”.
Meanwhile, the Greens and the Social Democrats were evidently happy to conclude that a tax by any other name would smell as sweet (and bring as much extra income for the state), to put it in the – admittedly slightly adapted – words of Shakespeare’s Juliet.
After all, regardless of the official name the government has given its measure, “levying random profits” made on the electricity market has the same effect as taxing electricity windfall profits.
“This is a levying of windfall profits,” Greens chief Omid Nouripous told radio station Deutschlandfunk in an interview on Monday. Asked whether his party had backed down on their demand for a windfall tax, he stressed: “The result will be the same.”
Seeing the happy ending to this weekend’s coalition scenes, it is certainly tempting to emulate the German government’s success in going the easy way and sidestepping – through purely rhetorical solutions – political differences, which are all too often not unlike Shakespearean family feuds.
But where would the drama be in that?
The Roundup
Despite leadership from European companies, analysis of climate goals adopted by businesses in G7 countries shows the 1.5C warming target of the Paris Agreement is “currently unachievable.”
The German government will uphold the country’s planned 2022 nuclear exit, shutting down its last three remaining nuclear reactors despite the ongoing European energy crisis.
New hurdles for Russian travellers seeking EU entry visas could take effect as soon as next week, with the European Commission saying on Tuesday that they expect to win quick approval from member states.
French President Emmanuel Macron confirmed he would not relaunch the MidCat gas interconnection project between France and Spain, but he hinted he could be open to persuasion.
As awareness of the wealthy’s disproportional carbon footprint grows, the notion of banning private jets has entered the political mainstream, and some politicians are taking note.
Meanwhile, the Irish Data Protection Commission issued a €405 million fine to the social media platform Instagram for breaching EU data protection rules concerning the privacy of minors.
Russia’s veteran ambassador to the EU, Vladimir Chizhov, is leaving Brussels for good after a record 17-year term in office. The name of his successor is still not publicly known.
Also, the EU is asking member states to identify specific zones for the deployment of renewable energies. But in France, where urban development law complicates administrative procedures, the advantages of these “go-to areas” have been challenged.
Look out for…
- The College of Commissioners will meet to discuss the European care strategy package.
- European Parliament President Roberta Metsola will sign a roadmap on migration and asylum.
- The European Parliament Special Committee on COVID-19 will meet to discuss lessons learned and share recommendations for the future.
- European Commission Vice President Frans Timmermans will deliver a keynote speech at the European Energy Forum.
- The European Economic and Social Committee will host a public hearing on “the challenges and opportunities linked to the creation of a digital euro.”
Views are the author’s.
[Edited by Nathalie Weatherald/Alice Taylor]
Source: euractiv.com
