New German government to push for EU energy tax deal

The coalition government formed by the Social Democratic Party (SPD) and the Green party at the end of October has also announced plans for an environmental tax reform at national level and has pledged to work toward the EU-wide introduction of energy taxes. Germany takes over the rotating presidency of the EU for six months starting 1 January.

The new environment minister is Jürgen Trittin, spokesman for the Green party prior to the election. Trittin has no specific environmental background but has previously served in a red-green coalition government, at state level, under new Chancellor Gerhard Schröder.

A key new measure agreed on by the two coalition partners is shifting some of the tax burden from labor to the environment. The tax reform plan envisions a three-step process to bring nonwage labor costs from currently 42.3% to below 40%. In the first stage, due to take effect in January, gasoline taxes are to rise by DM 0.06 (US $0.04) per liter. Taxes on heating oil, natural gas, and electricity are to go up as well.

Trittin’s appointment to the environment ministry means that France and Germany, traditionally the most powerful political axis in the EU, now both have Green environment ministers, as do Italy and Finland.