Berlin to scrap gas tax as it seeks funding sources – report

BERLIN – Germany’s coalition government plans to scrap a levy on consumers’ gas bills by Wednesday, the Frankfurter Allgemeine Zeitung reported on Tuesday, citing sources.

It is possible that a decision on the levy will be taken on Tuesday evening, the newspaper adds.

The Economy Ministry said talks regarding the tax were underway.

“A replacement of the fee makes sense if alternative financing ensures stabilization of gas markets,” said a ministry spokesperson.

The need for the tax, which was due to come into force on October 1 to help importers with the additional costs of replacing Russian gas, has been questioned after the government’s decision to nationalize Uniper, the largest importer of gas. Russian in Germany.

But the government is still discussing how to fund additional help for businesses and citizens and a possible gas price curb that could cost a double-digit sum of one billion euros, two government sources told Reuters. Ministry of Finance.

Berlin, which suspended its deficit limit of 0.35% of gross domestic product this year, could still have room to take on more debt this year, the sources added.

German Finance Minister Christian Lindner said he wanted to meet the debt ceiling next year but said the government “will find the necessary funds”, without giving further details.

Withdrawing money via the creation of a special fund is an option favored by the Greens party which heads the Ministry of Economy. But Lindner does not want such an option.

Germany’s federal budget foresees some 139 billion euros ($133.52 billion) in new debt in 2022, the second highest in the country’s history, in addition to a special fund of 100 billion euros for modernization of the army that Berlin announced after the invasion of Ukraine by Russia.

($1 = 1.0410 euros)

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