Merz starts summer PK: economy, electricity tax reduction and more!

Merz starts summer PK: economy, electricity tax reduction and more!

Chancellor Friedrich Merz held his first summer press conference today at 10:30 a.m. In this press conference, which covered numerous topics, Merz announced both investment support and a reduction in electricity taxes for energy-intensive companies. These measures are part of a comprehensive strategy to strengthen the German economy, which is currently facing challenges. How ZDF today reports, economic research institutes have recently raised their forecasts for the German economy, indicating a positive change in sentiment among investors. However, there are also critical voices that point to uncertainties in the USA.

A particularly affected medium-sized company warns of the high electricity prices in Germany, which are currently 22 cents per kWh, while prices in China are only 7.2 cents per kWh. This discrepancy, coupled with different wage costs, represents a significant challenge for the competitiveness of German industry.

Electricity tax reduction and budget issues

While the federal government originally planned to reduce electricity taxes for all consumers, the situation has changed. Merz and Finance Minister Lars Klingbeil defended the decision not to reduce electricity taxes for everyone. They emphasize the need to keep an eye on the federal budget and avoid indebtedness for future generations. Although the coalition agreement agreed to reduce electricity tax to the European minimum for all consumers, this agreement was watered down due to budgetary constraints.

The current budget draft stipulates that the reduction in electricity tax only applies to industry, agriculture and forestry. This decision has sparked widespread opposition, even within the governing parties. Politicians such as Steffen Bilger (CDU) and Dirk Wiese (SPD) are calling for a review of this measure as part of the budget process. Wiese emphasizes: “The issue is far from over.”

Relief measures and future plans

The criticism of the existing regulation comes at the right time, as the coalition committee of the CDU, CSU and SPD has already met next Wednesday to discuss the issue. Merz himself argues that electricity costs have now fallen back to a level that was before the Russian war of aggression on Ukraine. Nevertheless, the cabinet plans to start reducing network charges on January 1, 2026 and to abolish the gas storage levy for consumers.

The reduction in electricity tax for industry as well as agriculture and forestry should be further “permanent” in order to ensure competitiveness. The discussion about the electricity tax remains a central issue in the German political agenda.

In addition to these economic issues, foreign policy issues are also at the focus of the political agenda. Federal Interior Minister Alexander Dobrindt is meeting today with counterparts from several European countries on migration policy in order to develop a joint declaration on tightening European asylum policy. Federal Foreign Minister Johann Wadephul is also at a meeting in Paris with his French colleague Jean-Noël Barrot. The Federal Government is also taking its international responsibility seriously.

There was also some good news in today's press conference: Florian Wellbrock won a gold medal over five kilometers at the World Swimming Championships in open water. These successes contrast with tragic news, such as the death of extreme athlete Felix Baumgartner in a paragliding accident. Meanwhile, Sotheby's set a record by selling the most expensive meteorite ever auctioned, a 25kg piece from Mars, for $5.3 million.

Last but not least, the weather service forecasts changeable weather with showers and thunderstorms in the north and east of the country, while the west and southwest remain friendly. The temperatures range between 22 and 30 degrees.