DW: Germany coalition split deepens over fuel price relief measures

A dispute has emerged within Germany’s governing coalition over how to address persistently high fuel prices, exposing divisions between the centre-left Social Democrats (SPD) and the conservative Christian Democrats (CDU/CSU) on the scale and design of potential relief measures.

Economy Minister Katherina Reiche of the CDU/CSU bloc criticised proposals backed by the SPD as costly, economically inefficient and legally uncertain, arguing that any intervention should remain targeted, fiscally sustainable and preserve market price signals, Deutsche Welle reports.

Speaking to Welt TV, Reiche rejected the idea of an excess profits tax on energy companies, warning it could face constitutional challenges and risk undermining investment and refinery operations. She pointed to legal disputes linked to similar measures introduced in the aftermath of the 2022 energy crisis.

Finance Minister Lars Klingbeil of the SPD has argued that additional relief is needed to cushion households against inflationary pressure. He has floated options including a mobility bonus or a temporary reduction in energy taxes, potentially financed through an EU-level levy on excess profits in the energy sector.

Klingbeil has also expressed support for a flexible cap on petrol, diesel and heating oil prices and held consultations with business groups and trade unions on April 10 as part of ongoing discussions.

Coalition leaders from the CDU/CSU and SPD are expected to continue negotiations at a coalition committee meeting on April 11, as both sides attempt to bridge differences over how to balance consumer relief with fiscal constraints.

By Aghakazim Guliyev