German coalition parties come to blows over budget cuts and postponement of energy law – POLITICO

BERLIN (Reuters) – Germany’s ruling three-party coalition descended into public row on Tuesday as Greens Vice-Chancellor Robert Habeck accused Liberal Finance Minister Christian Lindner of breaking promises by delaying a controversial green energy law.

Habeck also attacked a plan by Lindner to impose painful cuts of up to 22 billion euros in next year’s budget and warned that Germany was facing ” [financial] needs everywhere, especially in the areas of decarbonization and digitalization.”

The spat highlights growing tensions within the government of Social Democrat Chancellor Olaf Scholz, who leads a coalition with the Greens and the Liberal Democratic Party (FDP).

The parties have differing views on how Germany should implement EU green plans to cut carbon emissions by 55% by 2030 and become climate neutral by 2050. This dispute on green energy is complicated by a tax shortfall, which reduces the financial leeway to subsidize the switch to renewable energy.

At the heart of the row is a new energy law for buildings, which aims to phase out gas and oil heating in German households by requiring that from next year any heating system newly installed in Germany must run 65% on renewable energy. This idea is highly controversial due to its cost, as the most viable option to achieve this green energy goal is a heat pump, which costs around €20,000 more than a conventional gas boiler.

The Greens had planned to submit the law to Parliament this week, insisting that the three government parties had previously agreed to the timetable and that existing heating systems would not be affected by the ban on gas and oil heating in a foreseeable future. However, the FDP blocked the Greens’ plan, which triggered a furious reaction from Habeck.

“The fact that [the law] is not defined [on the Bundestag agenda] is, in my opinion, a breach of the promise’ of the FDP, the Green vice-chancellor and economics minister told reporters in Berlin. He said the three ruling parties had agreed that the heating legislation should be approved “before the summer parliamentary recess”.

“It will no longer be possible with the postponement,” he added.

The Greens also castigated the FDP for the delay in a tweet while urging a speedy submission of the law to parliament to ensure “security and reliability of planning” for businesses and citizens.

The FDP immediately hit back, with energy spokesman Michael Kruse arguing that his party had said “constantly for weeks … that we have a fundamental need for change in terms of the content of the law, and that for us the draft presented by Robert Habeck does not constitute a sufficient basis for consultation for the parliamentary procedure.”

In a televised debate on Monday evening, FDP whip Christian Dürr and Katrin Göring-Eckardt, one of the Greens’ parliamentary vice-presidents, clashed so violently that it was barely conceivable that their parties would sit in the same government.

The Scholz Social Democrats sought to calm the escalating dispute on Tuesday, with Deputy Party Whip Matthias Miersch swear to hold talks this week to achieve “improvement of the law”.

Miersch stressed that the law still needs to be passed by parliament before the summer recess: “People are increasingly fed up with the quarrels over heating and want clarity,” he said.

However, new problems loom over planned budget cuts: As Bloomberg first reported on Tuesday, Scholz and Lindner plan to close a €20 billion financial gap in Germany’s 2024 budget with cuts spending in all ministries except defence.

This irritates the Greens, who are asking for more money for their projects, in particular to alleviate the costs that the switch to renewable energy entails for households and industries.

Habeck confirmed the threatened budget cuts on Tuesday, while saying he could not say exactly whether there was a shortfall of “20, 22 or 18 billion euros”.

“This is the first time in many years that the federal budget has been reduced, and … of course, the whole system is not adapted to that,” he warned.

Greens budget spokesman Sven-Christian Kindler criticized the planned cuts and said Germany should instead plug budget holes by raising taxes on the rich and cutting “climate-damaging subsidies”, as for certain types of diesel.