That is what the dispute over the stimulus package is all about
Incentives to buy cars, help for families, money for communities: Much of the planned stimulus package of 50 to 100 billion euros is controversial. The CDU chairwoman does not want to touch the minimum wage.
AIn early June, the federal government wants to put together an economic stimulus package worth billions to get the economy battered by the coronavirus crisis going again. The details are controversial in the grand coalition and are currently being agreed between the Chancellery and, above all, the finance and economics ministries. During this time, companies need leeway and liquidity to invest, said CDU chairwoman Annegret Kramp-Karrenbauer about the contents of the stimulus package. “But one thing is clear for the CDU: Not on the back of the workers. Therefore: hands off the minimum wage, ”she announced on Tuesday via Twitter. Federal Labor Minister Hubertus Heil also rejected calls from the CDU to lower the minimum wage.
A preliminary decision should be made on the weekend of Pentecost. The first contours are already emerging. Here are the answers to the most important questions about the stimulus package:
How much money does the government want to use?
Germany faces the worst recession of the post-war period this year. Especially in the second quarter, when large parts of public life and the economy came to a standstill because of the pandemic, there will be a slump of at least ten percent. In order to initiate a recovery in the second half of the year, the package is likely to have a volume of at least 50 billion euros, as it is called in coalition and government circles. Up to 100 billion euros are conceivable, depending on what exactly is added.
The exact amount has not yet been determined. In some cases, 150 billion euros have already been mentioned in media reports. These were invented orders of magnitude, said Federal Finance Minister Olaf Scholz on the ARD: “You can’t throw the money around like that at all.” First, what is really necessary must be defined. “We have to approach the matter more sparingly.” The measures would also be limited to the years 2020 and 2021.
Bavaria’s Prime Minister Markus Söder sees 100 billion euros in additional debt as the pain limit. “We don’t run into over-indebtedness, which means that we are no longer able to act.”
What is planned for small and medium-sized companies?
The Ministry of Economic Affairs wants to protect the self-employed and medium-sized businesses from bankruptcy. “Some companies simply run out of time,” says the CDU-led ministry. Companies with up to 249 employees should be helped with operating costs if they can demonstrate a significant drop in sales. Funds for the period June to December are being considered here. The costs would amount to 25 billion euros by August alone. What is needed after that depends on how the number of new infections develops and how much the corona restrictions can be withdrawn. It remains to be seen whether this will become part of the stimulus package or whether it will come before that.
It is also conceivable to improve depreciation options and provide further tax relief. The former would probably lead to more investment by companies. The latter would quickly provide many companies with urgently needed liquidity. You could offset losses from this year over and above the current level at the tax office against profits from previous years.
In addition, the solidarity surcharge could be omitted from July. Parts of the Union support this SPD proposal, but unlike the coalition partner, want to abolish it completely and not only for most of the payers.
What is planned for families?
The Union and the SPD are largely in agreement in the run-up to the coalition committee next week to do more for families who are particularly hard hit in the crisis due to closed daycare centers and schools. The SPD is demanding a bonus of 300 euros per child in order to also boost private demand. That should cost the tax authorities around five billion euros. The path is also conceivable in the Union. North Rhine-Westphalia’s Prime Minister Armin Laschet (CDU) is even supposed to demand 600 euros.
What about the cities and towns?
The municipalities are considered to be the key because a lot of investments are made at the municipal level. However, the municipalities are currently breaking trade taxes and many municipalities were already significantly over-indebted before the Corona crisis, which massively limits their room for maneuver. Union and SPD want to help here – but how exactly is controversial. The Union does not want to support the assumption of old debts, as proposed by Scholz, as several representatives of the Bundestag parliamentary group recently said. A compromise could be to compensate for the missing trade tax income – probably around twelve billion euros, which the federal and state governments could share. The funds could be tied directly to conditions to invest them.
Is there a car scrapping bonus again?
According to coalition circles, there will probably be the most intense debates on the auto industry. Above all, the auto states of Bavaria, Baden-Württemberg and Lower Saxony insist on extensive help because of the numerous jobs that depend on the industry. It is particularly controversial whether only e-cars and hybrid models with additional purchase incentives are promoted, or also modern gasoline and diesel vehicles. Experts point out that the infrastructure must first be expanded, with significantly more charging stations, before electric cars can make a breakthrough. Chancellor Angela Merkel (CDU) has promised not to lose sight of climate protection in the economic stimulus package. In the coalition, however, it is said that in the end the auto countries will still enforce purchase premiums again.