Government dispute on power tax cut for all still not over

The top brass from Germany's Social Democratic Party (SPD) continued to call on the government to reduce the electricity tax for all businesses as well as private consumers.

They do so despite a decision in Berlin to only implement a cut for industry.

Hendrik Wüst, state leader in North Rhine-Westphalia, aired his discontent over the move on Friday, saying lowering the tax across the board had been "a central promise of relief from the government." Wüst belongs to the conservative party CDU, which forms the German government together with its Bavarian sister party CSU and the Social Democrats.

"All parties were aware of the state's financial situation when this promise was enshrined in the coalition agreement," he told the Bild tabloid.

Cutting the tax for all was a key plank of the coalition agreement between Chancellor Friedrich Merz's Christian Democratic Union, the Bavaria-only Christian Social Union and the centre-left SPD, but was surprisingly left out of a draft 2025 budget last week due to financial concerns.

Despite pressure from business associations, opposition groups and lawmakers within the coalition partners, a high-stakes meeting of party heavyweights was unable to secure a deal to finance the policy in hours-long negotiations late on Wednesday.

Instead, the committee backed a plan to cut the tax for large industries, agriculture and forestry only, along with further measures to lower electricity network charges and abolish a gas storage levy.

Wüst said he was hoping for a "clear readjustment in the upcoming parliamentary procedure."

"All options should be re-examined as to how an electricity tax reduction for everyone can be realized in a timely manner. This project must not simply be put on the back burner," the state leader stressed.