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Show leniency on EU spending rules, says senior German MP

The EU should continue to suspend strict rules on borrowing and spending to help debt-mired countries like Italy until the pandemic is over, the new chairman of the German parliament's powerful EU affairs committee told AFP on Monday.

European flags
EU flags fly outside of the European Parliament buildings in Brussels. Photo: picture alliance/dpa | Michael Kappeler

Anton Hofreiter, a senior Green party MP, said Rome in particular deserved leniency as it finds its feet again after the blows levelled by Covid-19.

That flexibility should also extend to countries making ambitious expenditures in climate protection, he added.

Asked how the EU should help struggling countries, Hofreiter replied, “by continuing to temporarily suspend the Stability Pact because we’re really in a very special crisis”.

“We don’t know how long the corona crisis will continue,” he said, sounding a more conciliatory note than new chancellor Olaf Scholz of the centre-left Social Democrats.

“Under (Prime Minister Mario) Draghi, Italy has done a lot of things well in recent months. No one has an interest in it sinking even deeper into an economic crisis.”

The Stability and Growth Pact is a set of rules designed to keep member states in the black and ensure that governments don’t overspend. 

The European Union temporarily suspending these fiscal discipline rules in 2020, allowing eurozone members to boost their public spending in response to the pandemic.

Italy’s public debt soared to 155 percent of its GDP — more than double the EU’s 60 percent ceiling — and Brussels has expressed concern that it is still budgeting to spend too much this year.

READ ALSO: German cabinet agrees €60 billion climate investment plan

‘Smart proposal’

Hofreiter said the proposals of his party, junior partners in Germany’s ruling coalition along with the pro-business Free Democrats, for allowing greater investment in “green” projects were “very smart”.

Nevertheless, he said, some of the planks of the bloc’s Stability and Growth Pact, which dictates rules on debt and public deficits, “stand in the way of the Green Deal”, which aims to make the EU climate neutral by 2050.

French President Emmanuel Macron, whose country holds the rotating EU presidency, has joined forces with like-minded leaders such as Draghi to urge Brussels to reform its fiscal rules to allow greater investment spending while still managing debt levels.

Scholz, however, has tacked closer to Angela Merkel’s previous course of enforcing at least long-term fiscal rectitude — a potential source of friction in the government’s first 100 days.

By Deborah COLE and Martin TRAUTH

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TRAVEL NEWS

German states threaten to block €9 ticket in Bundesrat

Germany's cut-price transport ticket is supposed to go on sale next Monday - but a battle over financing is threatening to torpedo the government's plans.

German states threaten to block €9 ticket in Bundesrat

An feud between the federal and state governments intensified on Monday as state leaders threatened to block the government’s most recent energy package when it is put to a vote in the Bundesrat on Friday. 

The battle relates to the government’s plans for a budget transport ticket that would allow people to travel on local and regional transport around Germany for just €9 per month.

Though the 16 states have agreed to support the ticket, transport ministers are arguing that the low-cost option will blow a hole in their budgets and lead to potential price hikes once autumn rolls around.

They claim that current funding promised by the Federal Transport Ministry doesn’t go far enough.

READ ALSO: 

“If the federal government believes it can be applauded on the backs of the states for a three-month consolation prize and that others should foot the bill, then it has made a huge mistake,” Bavaria’s Transport Minister Christian Bernreiter (CSU) told Bild on Monday.

The government has pledged €2.5 billion to the states to pay for the measure, as well as financial support for income lost during the Covid crisis. 

Transport Minister Volker Wissing. of the Free Democrats (FDP), said states would also receive the revenue of the €9 ticket from customers who take advantage of the offer. 

“For this ‘9 for 90 ticket’, the €2.5 billion is a complete assumption of the costs by the federal government,” said Wissing on Thursday. “In addition, the states are also allowed to keep the €9 from the ticket price, so they are very well funded here.”

Transport Minister Volker Wissing

Transport Minister Volker Wissing (FDP) speaks ahead of a G7 summit in Düsseldorf.

However, federal states want a further €1.5 billion in order to increase staff, deal with extra fuel costs and to plan for the expansion of local transport in Germany.

Mecklenburg-Western Pomerania’s Minister for Economic Affairs, Reinhard Meyer (SPD), told Bild that there would be “no approval (on Friday) as long as the federal government does not provide additional funds.”

Baden-Württemberg’s Transport Minister Winfried Hermann (Greens) also warned that “the entire package of fuel rebate and €9 euro ticket could fail in the Bundesrat” if the government doesn’t agree to the state’s demands on funding.

The Bundesrat is Germany’s upper house of parliament, which is comprised of MPs serving in the state governments. Unlike in the Bundestag, where the traffic-light coalition of the Social Democrats (SPD), Greens and Free Democrats (FDP) has a majority, the CDU is the largest party in the Bundesrat. 

What is the €9 ticket?

The €9 monthly ticket was announced early this year as part of a package of energy relief measures for struggling households.

With the price of fuel rising dramatically amid supply bottlenecks and the war in Ukraine, the traffic-light coalition is hoping to encourage people to switch to public transport over summer instead. 

The ticket will run for three months from the start of June to the end of August, and will allow people to travel nationwide on local and regional transport. Long-distance trains like IC, EC and ICE trains will not be covered by the ticket. 

It should be available to purchase from May 23rd, primarily via ticket offices and the DB app and website. 

Some regional operators, including Berlin-Brandenburg’s VBB, have also pledged to offer the ticket at ticket machines.

READ ALSO: EXPLAINED: How to get hold of the €9 travel ticket in Berlin

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