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Merkel preparing to drop nuclear tax in deal with industry: report

The Local · 25 May 2011, 08:55

Published: 25 May 2011 08:55 GMT+02:00

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“Everything is moving towards scrapping [the tax],” a source in the coalition told Wednesday’s Financial Times Deutschland, which reported that a senior government representative had said the same.

The Finance Ministry, which as recently as April had been checking the chances of increasing the tax, told the paper that talks were still ongoing.

Finance Minister Wolfgang Schäuble has always blocked any suggestion of taking a fiscal hit in connection with energy policy.

Although the law providing for the tax was implemented at the start of the year, payment is only due when the fuel elements are swapped – something currently being undertaken at the EON power station Grafenheinfeld.

EON refused to comment Financial Times Deutschland due to the fact that it has kept the option of suing against the tax, open.

Although the dropping of the tax is likely to be portrayed as being the only way the energy industry can or will invest in other sources of energy, the paper suggests it would be an unspoken deal.

This would see the industry accepting the reduced running time of their nuclear power stations without suing. A number of modern gas-fired generating stations will have to be built in Germany to enable the nuclear switch-off, the paper noted.

“The coalition is, however, risking its credibility with the tax waiver,” the paper wrote.

The reasoning will be that the tax was calculated in relation to the profits expected from the full running-times of the 17 German nuclear power stations, which will be reduced when they are closed down early. “However, the government only last autumn put great import on the idea that these had nothing to do with each other,” the paper said.

The legal basis for the tax said the anticipated €2.3 billion it would raise was to pay for the work needed on the nuclear waste storage site Asse. Even without the eight oldest nuclear power stations which are currently offline and not expected to be turned on again, the tax should raise €1.5 billion.

The idea was for the tax to be separate from electricity prices, hitting only the profits of the energy companies, which have been campaigning against it for months, the paper said.

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Chancellor Angela Merkel indicated she might soften two weeks ago when she told the weekly paper Die Zeit that their situation, “was not so exorbitantly good that they can take any burden.”

Social Democratic Party chairman Sigmar Gabriel accused Merkel of preparing to strike a deal with the energy industry only last week. He was focussing not on the fuel element tax, but on the safety standards being used to decide whether nuclear power stations could continue to operate. He said the safety commission currently checking them was not doing a thorough job.

The Local/hc

The Local (news@thelocal.de)

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Your comments about this article

10:57 May 25, 2011 by ame64
What a Joke, CDU selling out again. Ever heard of "hard" politics.
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