Germany: Rise in energy prices want to compensate

Due to the gas crisis in Germany, gas and electricity prices jumped, exceeding historical highs. The faction of the Christian Democrats in the Bundestag proposes to partially compensate the population for the increase in energy costs.

The EEG-Umlage surcharge, charged since 2000, is about a quarter of the price of electricity. This is a fixed fee that green electricity producers receive for supplying electricity, regardless of the market price. The FDP deputies demand to abolish the surcharge on the production of environmentally friendly electricity, EEG, as well as to reduce VAT on types of energy that are used for heating. Recall that on January 1, the coalition already reduced the EEG surcharge from 6.5 to 3.7 cents per kilowatt-hour. The reason is that in the fall of 2021, electricity prices increased significantly.

In addition, MPs are for increasing tax breaks for those who need to travel far to work (Pendlerpauschale). In early 2021, commuting over 21 kilometers was raised to 35 cents. However, not everyone is for the introduction of these compensations.

Marcel Fratzscher, president of the German Institute for Economic Research (DIW), believes that “an increase in tax breaks will ease the wallets of car owners, while those who live close to work will receive less compensation, or not at all, for example, for heating costs.”

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