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POLITICS

Social Democrats back German railway privatization

Germany's center-left Social Democrats agreed on Monday to a partial privatization of the country's national railway operator Deutsche Bahn.

Social Democrats back German railway privatization
Workers lay new rails on Monday near Wismar. Photo: DPA

Party leaders approved a plan to transform the Deutsche Bahn into a publicly owned holding company with no more than 24.9 percent participation from private investors. Seventy-seven SPD members of the leadership council voted in favour of the proposal, 22 were opposed and two abstained. Backing for the plan was unexpectedly high, with anticipated fierce opposition from the party’s left largely failing to materialize amid calls to support SPD chairman Kurt Beck.

Social Democratic approval was an important step toward rail privatization, a major goal for German Chancellor Angela Merkel and her conservative Christian Democrats. The two parties, partners in Germany’s ruling coalition, will meet in committee on April 28 to hammer out the details between their two plans.

“The Social Democratic position is clear. Now the ball is in the Christian Democrats’ court,” Secretary General Hubertus Heil said.

German Transport Minister Wolfgang Tiefensee, also a Social Democrat, said he was “very satisfied” with Monday’s agreement.

The rail infrastructure – including train stations and 34,000 kilometres (21,127 miles) of track – would remain in public hands under the Social Democratic plan, developed in a policy group led by SPD chief Beck. But private companies could invest in subsidiaries to run freight and passenger traffic.

Merkel’s Christian Democrats criticized the proposal for limiting private participation to 24.9 percent – a ceiling Heil and other Social Democrat leaders called ‘non-negotiable’ while they remain in the junior partner in Merkel’s governing coalition.

Christian Democratic parliamentary group leader Volker Kauder called the 24.9-percent figure “an initial step” in an interview with public broadcaster ARD, saying that to allow up to 49 percent private investment would be more appropriate.

DDP/DPA

POLITICS

EU ministers urge unity after Germany’s energy ‘bazooka’

EU finance ministers on Monday pleaded for unity after Germany announced a €200 billion plan to help German households and businesses pay for high energy prices, amid accusations that the EU's biggest economy was acting alone.

EU ministers urge unity after Germany's energy 'bazooka'

Europe is struggling with historically high energy prices as it faces an early autumn cold snap and a coming winter almost certainly to be endured without crucial Russian gas supplies because of the war in Ukraine.

Many EU countries have announced national programmes to shield consumers from the high prices. But Germany went the furthest on Friday when it announced its mammoth plan, which will see help pouring to Germans for two years.

Arriving to talk with his eurozone counterparts, German Finance Minister Christian Lindner insisted the spending was “proportionate” to the size of Germany’s economy and said his goal was to use as little of the money as possible.

READ ALSO: Germany to spend €200 billion to cap soaring energy costs

But Germany’s largesse rankled several EU capitals, some of which feared their industries could take severe blows while Germany’s sits protected, deforming the EU’s single market.

Outgoing Italian prime minister Mario Draghi has slammed Berlin for its lack of solidarity and coordination with EU partners.

French Finance Minister Bruno Le Maire, without directly criticizing Berlin, called on partners to agree a common strategy against the price shock and for countries to refrain from going it alone.

“The more this strategy is coordinated, united, the better it is for all of us,” he said.

Risk to ‘European unity’

Others pointed to the unprecedented solidarity shown in the Covid-19 crisis in which the 27 EU nations, against all expectations, approved a jointly financed €750 billion recovery plan.

“Solidarity is not only on the German shoulders, I think this is something that we have to deliver at European level,” said EU economics affairs commissioner Paolo Gentiloni.

“We have very good examples from the previous crisis on how solidarity can react to a crisis and also reassure financial markets. I think that this is our goal,” he said.

While a Covid-style recovery plan is not in the cards for now, Le Maire said €200 billion in loans and €20 billion in aid should be devoted to REPowerEU, a programme to help countries break their dependence on Russian gas.

READ ALSO: Will Germany set a gas price cap – and how would it work?

Bruegel, a highly influential think tank in Brussels, called the German plan a spending “bazooka” that many EU countries were unable to match, creating a potential source of animosity.

“If the German gas price brake gives German business a much better chance to survive the crisis than, say, Italian business, economic divergences in the EU could be deepened, and European unity on Russia undermined,” it said in a blog.

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