Germany to pursue fuel levy as protests grow
© 2000 Reuters Limited
September 12, 2000
Story by Clifford Coonan
BERLIN - Germany's centre-left government yesterday stood by plans to raise energy taxes in the face of mounting pressure from opposition parties, truckers, motoring lobbyists and farmers for relief from escalating fuel costs.
One haulage industry official said the sector had "lost patience" with the government over the issue and said protests aimed at disrupting the country's transport network could begin as soon as Thursday.
Chancellor Gerhard Schroeder's "Red-Green" alliance has made raising "ecology" taxes - including on transport fuels - a central plank of its strategy to bail out the welfare state while cutting direct taxes to boost growth and jobs.
"Germany is not going back into the debt trap," Finance Minister Hans Eichel said ahead of a meeting of senior Social Democrats, who govern in coalition with the ecologist Greens.
Eichel said there would be no further tax giveaways on top of the 45 billion marks ($20 billion) in corporate and income tax cuts legislated for next year.
"There's no more," he said.
Participants at a parliamentary meeting of Schroeder's Social Democrats in Berlin said the chancellor had fully supported Eichel's line during the session.
The government plans next January to add the third of what will be a total five incremental tax hikes on fuel spread over five years. Each hike is worth six pfennigs a litre - around three percent of the current price of petrol.
German truckers and farmers blocked traffic in two towns in Chancellor Gerhard Schroeder's home state of Lower Saxony at the weekend and the region's trucking group warned those protests could mark the start of a "forest fire".
SOLUTIONS SOUGHT
"We are expecting solutions in the short term which will cut costs," said Bernhard Franzky, head of Lower Saxony's transport association. "A step in the right direction would be to cut the ecology tax and reduce car taxes to the European minimum."
Handelsblatt newspaper said transport companies were considering whether to proceed with protests aimed at crippling road distribution networks throughout Germany from Thursday.
"We have lost patience with these politicians who in their ignorance refuse to offer any form of relief," it quoted Manfred Boes, head of the Federation of Hauliers and Logistics Firms (BLS), as saying in a summary of an article to appear Tuesday.
Unlikely, however, are the kind of blockades of oil refineries and storage depots which swept France last week, hit Belgium at the weekend and are gaining momentum in Britain.
German hauliers have warned that, unlike in other European countries, they could be held legally liable for damages arising from any illegal protests, potentially ruining their businesses.
Despite Eichel's firm line, some SPD regional leaders have come close to breaking ranks with the government by calling for relief of some kind for hard-pressed hauliers.
Germany's conservative opposition, which for months has been struggling to climb out of a trough following a campaign finance scandal surrounding former Chancellor Helmut Kohl, has also seized on the issue to attack.
Christian Democrat leader Angela Merkel launched a campaign demanding the government scrap the eco-tax, under which petrol tax will rise by six pfennigs (2.6 U.S. cents) a litre each year through 2002 to fund transfers to the state pensions system.