Scholz said on Sunday on ARD that the so-called concerted action against inflation is about starting a long-lasting process with consultations.
Federal President Frank-Walter Steinmeier put pressure on over the weekend to further relieve consumers and industry.
“We haven’t experienced that before, four times higher prices, not only at the gas stations, but above all for the gas that is needed to run the heating at home,” said Steinmeier in a ZDF summer interview. “The same applies to industry.”
Various options are currently being discussed for financially cushioning high price increases – an overview:
In government circles it was said that the special payment could be based on the model of the tax-free corona bonus, which was recently increased. After that, the bonus that employers pay to their employees because of the pandemic is tax-free up to 1,500 euros.
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For the Treasury, the costs are manageable, it was said in government circles. At the same time, it is an incentive for employers and unions to rely on one-off payments instead of permanent wage increases. That could help against the feared wage-price spiral.
Scholz has since put the idea into perspective. “Of course we thought about how we could support union activities, especially when prices go up next year,” he said. “But no one is suggesting that that’s why the actual pay rises shouldn’t happen.”
Higher wages
The chairwoman of the SPD, Saskia Esken, is campaigning for higher wages. Measures are needed “that help in the long term and at the same time do not overwhelm the state in the long term,” she told the Handelsblatt.
The President of the German Institute for Economic Research (DIW), Marcel Fratzscher, also advocates this. “Higher wages and social benefits are the only sustainable way that people on low incomes can cope with higher energy and food prices in the long term,” Fratzscher told the Handelsblatt.
Higher basic security
Green party leader Britta Haßelmann insists on targeted relief for low earners. “Where help is needed particularly urgently, we will also have to talk about targeted government relief such as higher standard rates in basic security,” said Haßelmann to the newspapers of the Funke media group.
Federal Finance Minister Christian Lindner rejected calls for a quick further relief package to cushion the high cost of living, but announced “another relief package” for 2023. “The standard rates of basic security will be adjusted upwards in any case, which helps those who particularly need it,” said the FDP chairman of the “Wirtschaftswoche” last week.
VAT reduction on staple foods
The CDU social wing describes what a temporary reduction in VAT on certain foods could look like. “VAT on staple foods, which have become up to 40 percent more expensive, must be temporarily reduced. The bag of chips must not be cheaper than the carrot juice,” the newspapers of the Funke media group quote from a paper by the board of directors of the workers’ wing of the Union (CDA).
Federal Food Minister Cem Özdemir goes even further. He would like the abolition of VAT on fruit and vegetables, “because consumer spending plays a major role, especially for the poor, and because that would also contribute to healthy eating,” said the Green politician.
The economist Fratzscher also considers a VAT exemption for certain basic service products to be “socially smart and economically justifiable”.
commuter allowance
Brandenburg Prime Minister Dietmar Woidke (SPD) is calling for an increase in the commuter allowance. “The instrument has proven its worth,” he told the Handelsblatt.
In a first step, the commuter allowance for a commute of more than 21 kilometers was raised in May from 35 to 38 cents per kilometer retrospectively to January 1.
Termination moratorium for tenants
The tenants’ association calls for “extensive measures” to protect tenants from losing their apartments. “A termination moratorium is urgently needed to ensure that no one can be terminated who cannot pay their utility bills or high price adjustments on time due to sharply increased heating costs,” it says.
Most apartments in Germany are heated with gas. The tenants’ association is also demanding state support in the form of permanent heating cost subsidies.
gas price cap
A legal cap on gas prices has been discussed for months. The model would be France, which had already frozen gas prices for many consumers in October. Frank Werneke, head of the Verdi services union, called for a “gas price cap at the pre-crisis level for a volume of 12,000 kilowatt hours per household so that the supply of affordable heating energy remains secure”.
The head of the SPD employee wing, Cansel Kiziltepe, also spoke out in favor of a gas price cap for basic consumption: “People can’t do anything about the increased prices, neither in housing nor in energy supply.”
energy saving bonus
The Düsseldorf economist Jens Südekum advocates financial incentives to save energy. Every kilowatt hour saved in private households is later available to industry and reduces the likelihood of an economic crisis.
>> Read also: Economic research institute: Every fourth person has to spend more than ten percent on energy
The bonus idea also supports the economist Veronika Grimm and the chairman of the Advisory Council for Consumer Affairs, the economist Peter Kenning. In an article for the Handelsblatt, they propose “high bonus payments” that should be given to households that reduce their gas consumption by a specified percentage.
Nine euro ticket
The nine-euro ticket introduced at the beginning of June has given Deutsche Bahn a boom in demand. Despite the success, which also leads to a considerable relief for consumers, Federal Finance Minister Christian Lindner (FDP) has already rejected a follow-up rule.
Chancellor Olaf Scholz (SPD) also rejects an extension. The measure will expire, said Scholz on ARD. The ticket was always focused on three months. It does contribute to the fact that everyone is now saying that about 90 percent of the burdens that citizens have as a result of higher prices are compensated for on lower and middle incomes. But it is only part of the overall measures.
Demands for a successor plan had recently come from the green coalition partner, among others. The national chairman of the Jusos, Jessica Rosenthal, is also wondering why the “successful nine-euro ticket” should end again at the end of August. “This social and climate policy success must continue in the future.”
More: Chancellor Scholz wants to compensate for the dramatic increase in gas prices with state aid.