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 Social Democrat (SPD) Economy Minister and Vice-Chancellor Sigmar
Gabriel has outlined a much-needed reform to a system of costly
subsidies which has helped to fund a boom in green energy in
Germany. He is now working on details.
The reform, a delicate balancing act between maintaining growth in
the renewables sector and keeping heavy industry on board with
affordable power, envisages cuts of up to a third in green subsidies
by 2015 but also reduces support for industry.
The Federation of German Industry (BDI) said Gabriel's plans put
900,000 jobs in Germany at risk, according to Welt am Sonntag. In a
letter to 900 companies, BDI chief Ulrich Grillo said the existing
help given to energy-intensive firms was a condition for companies
to stay in Germany.
"In this way (with an additional burden for companies), there will
be a risk of companies moving away and that can lead to big job
losses," Grillo wrote, according to the paper.
Industry accounts for around a quarter of Germany's export-oriented
economy. Last week, ArcelorMittal <ISPA.AS>, the world's biggest
steelmaker, warned the energy reforms would prompt companies to
scale back investments.
"PURE MADNESS"
Some members of Chancellor Angela Merkel's conservative bloc in
parliament have also demanded changes in Gabriel's plans.
"We will certainly not pass Gabriel's blueprint on a reform of the
renewable energy law in its current form," senior conservative Peter
Ramsauer told Die Welt newspaper.
He said it was "pure madness" to trim benefits for companies that
generate their own electricity and added that big employers such as
rail operator Deutsche Bahn could be hit.
Until now, producers of power for their own industrial use have been
exempted from a surcharge added to power bills which is funnelled to
green energy producers and guarantees them a 'feed-in-tariff' above
market prices.
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European Energy Commissioner Guenther Oettinger urged the German
finance minister to reduce energy tax to help German companies stay
competitive. Taxes and charges added to consumers' bills for the
renewable subsidies make up about half of companies' energy costs,
he said.
'Mittelstand' companies, the small and medium-sized firms that form
the backbone of the German economy, also want lower taxes on
electricity.
"Cut power tax now: ease the burden for Mittlestand and
citizens," Mario Ohoven, head of the BVMW Mittelstand group wrote in
a letter seen by the Bild daily.
Gabriel wants to have his reform passed by the summer.
While the 'grand coalition' of Merkel's conservatives and Gabriel's
SPD has a big majority in the lower house, the Bundesrat upper house
could delay it if Germany's 16 federal states have major objections.
SPD Environment Minister Barbara Hendricks urged the states to put
aside individual concerns — some northern states are worried about
cuts to wind power subsidies while Bavaria is concerned about
biomass — and to think of the greater good.
"If the states insist on the demands of the last few days, there
won't be enough public spirit," she told Die Welt.
(Additional reporting by Andreas Rinke;
editing by Gareth Jones)
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