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ECONOMY

TV licence fee reform will hurt businesses, experts warn

The planned reform of Germany’s unpopular GEZ broadcasting licence fees could heavily burden businesses, industry experts warned on Monday.

TV licence fee reform will hurt businesses, experts warn
Photo: DPA

Over the summer, Germany’s 16 states agreed to overhaul the system funding public TV and radio. But what was intended to be a simplification could cost some companies and households up to double the fees they paid previously, the president of the German Chambers of Industry and Commerce (DIHK) said.

“In cases of doubt the economy would have to pay up to double as much as before,” Hans Heinrich Driftmann told daily Neue Osnabrücker Zeitung. “It will hit some, such as chain stores, particularly hard.”

In an example, Driftmann explained that a drugstore chain with 23,000 workers and 1,150 stores would have to pay up to half a million euros per year in GEZ fees, but a single-location business the same size would pay just €32,000.

“We can’t accept that,” the DIHK president said.

Meanwhile Otto Kentzler, head of the German Confederation of Skilled Crafts (ZDH), told daily Passauer Neue Presse that it was unacceptable for “numerous businesses to be in danger of paying two, three or even six times as much as before.”

Already German businesses provide some €450 million in GEZ fees to finance the public broadcast system, he said, saying this made up about six percent of the organisation’s entire earnings.

The new GEZ fee model, set to begin in 2013, would charge a per-household fee for private television and radio owners. Businesses would also no longer pay per device, with fees being based on their number of employees, locations and vehicles.

The Cologne-based GEZ stands for the mouthful Gebühreneinzugszentrale der öffentlich-rechtlichen Rundfunkanstalten in der Bundesrepublik Deutschland, or “Fee-collection Centre of Public Broadcasting Institutions in the Federal Republic of Germany.”

The organisation requires a licence of some 42.5 million owners of televisions, radios and, for the past few years, even computers and mobile phones that access the internet. The fee money funds public broadcasters such as ARD and ZDF, and is often collected by plainclothes officials who go door-to-door busting fee-shirkers.

It’s a difficult task for the organisation’s 1,100 employees, and consumers frequently bring cases against the GEZ to court. The 2013 reforms are meant to relieve families of high fees and reduce internal costs.

DAPD/ka

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ECONOMY

German consumer prices set to rise steeply amid war in Ukraine

Russia's war in Ukraine is slowing down the economy and accelerating inflation in Germany, the Ifo Institute has claimed.

German consumer prices set to rise steeply amid war in Ukraine

According to the Munich-based economics institute, inflation is expected to rise from 5.1 to 6.1 percent in March. This would be the steepest rise in consumer prices since 1982.

Over the past few months, consumers in Germany have already had to battle with huge hikes in energy costs, fuel prices and increases in the price of other everyday commodities.

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With Russia and Ukraine representing major suppliers of wheat and grain, further price rises in the food market are also expected, putting an additional strain on tight incomes. 

At the same time, the ongoing conflict is set to put a dampener on the country’s annual growth forecasts. 

“We only expect growth of between 2.2 and 3.1 percent this year,” Ifo’s head of economic research Timo Wollmershäuser said on Wednesday. 

Due to the increase in the cost of living, consumers in Germany could lose around €6 billion in purchasing power by the end of March alone.

With public life in Germany returning to normal and manufacturers’ order books filling up, a significant rebound in the economy was expected this year. 

But the war “is dampening the economy through significantly higher commodity prices, sanctions, increasing supply bottlenecks for raw materials and intermediate products as well as increased economic uncertainty”, Wollmershäuser said.

Because of the current uncertainly, the Ifo Institute calculated two separate forecasts for the upcoming year.

In the optimistic scenario, the price of oil falls gradually from the current €101 per barrel to €82 by the end of the year, and the price of natural gas falls in parallel.

In the pessimistic scenario, the oil price rises to €140 per barrel by May and only then falls to €122 by the end of the year.

Energy costs have a particularly strong impact on private consumer spending.

They could rise between 3.7 and 5 percent, depending on the developments in Ukraine, sanctions on Russia and the German government’s ability to source its energy. 

On Wednesday, German media reported that the government was in the process of thrashing out an additional set of measures designed to support consumers with their rising energy costs.

The hotly debated measures are expected to be finalised on Wednesday evening and could include increased subsidies, a mobility allowance, a fuel rebate and a child bonus for families. 

READ ALSO: KEY POINTS: Germany’s proposals for future energy price relief

In one piece of positive news, the number of unemployed people in Germany should fall to below 2.3 million, according to the Ifo Institute.

However, short-time work, known as Kurzarbeit in German, is likely to increase significantly in the pessimistic scenario.

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