Status: 8/11/2022 1:05 PM
In view of rising energy and food prices, Chancellor Scholz announced another aid package. He does not fear social unrest. He called Finance Minister Lindner’s tax plans “very useful”.
Chancellor Olaf Scholz wants to continue to support citizens in the current energy and inflationary crisis. “There will be another package,” he told the federal press conference and also referred to aid that had already been decided. Both recipients of support services and people with low or middle incomes are supported, said the chancellor. “We will do everything to get them through this difficult time.”
The packages would have a total volume of around 30 billion euros. He also referred to measures already known or already decided, such as the increase in the minimum wage, improvements in housing allowances or the citizenship allowance planned for next year to replace the Hartz IV system. The aim is that “no one is confronted with insoluble problems”.
Kudos to Lindner
Of course, “we have to put together a global package that includes all population groups,” Scholz said. This will also include tax benefits. Apparently, he was referring to the proposals of the leader of the FDP, Christian Lindner, which caused a lot of criticism from experts, but also within the government. “The Minister of Finance yesterday presented his contribution to the necessary considerations. I find this very, very helpful,” Scholz said. It’s “good service”.
The chancellor sees no need for a supplementary budget this year. “We assume that we can manage our ideas within the financial framework that is available to us,” he said. “Now we must focus on developing concrete proposals and I’m sure we can finance them.” Scholz also stressed that the federal government wants to meet the debt brake again next year.
On the possibility of an eventual excess of tax on profits, he referred to the negative attitude of the FDP. A tax on excessive profits, like a higher income tax for the highest paid, is not in the coalition agreement and is also technically very challenging.
No social unrest expected
The chancellor does not expect social tensions in Germany to increase due to the difficult economic situation and rising prices. “I don’t think there will be unrest in this country in the way described – because Germany is a welfare state,” he said.
According to him, the two planned liquefied natural gas terminals on Germany’s North Sea coast should be ready this winter. The first terminals would be “connected early next year this winter”. It was planned in recent years. “That’s why it’s going to be fast now.” It is currently expensive to purchase gas. “But we’ll always have enough.”
Scholz said he has seen progress in negotiations on a price ceiling for Russian oil. This price cap only works if it is organized globally. There are intense discussions about this, which are not over yet.
The chancellor also said he was in favor of a gas pipeline from Portugal via Spain and France to Central Europe. He spoke to his colleagues in those countries, as well as EU representatives, about the project and strongly advocated for it to be carried out.
More support for Ukraine announced
Scholz also announced more massive support for Ukraine. Russia’s war continues to demand “that we make far-reaching decisions to support Ukraine in its struggle for independence.” The government is doing this through “a massive break from previous practice by providing many, many, very effective, long-range weapons. And we will continue to do so for the foreseeable future.” Scholz was initially unspecific when it came to the question of future weapons deliveries.
He called the war the greatest challenge today. Russia must realize “that it cannot end in a dictated peace, as the Russian president and his political leaders probably initially had in mind.” Scholz emphasized, “It shouldn’t work and it won’t work either, I’m sure of it.”
“Russian President Bears Responsibility”
The chancellor also denounced Russian war crimes. He watched many of these acts “with great horror”. “This is a criminal war, there’s no doubt about it.” He was convinced that all measures would be taken to solve these crimes. “The Russian president is responsible for this war.” He did not respond to the question whether Putin would have to answer in person.
Given Russian aspirations for power, Scholz emphasized that he had no illusions. He deliberately described the “turning point” that followed the Russian war of aggression against Ukraine as such. “It’s a change in the reality we live in.”
He does not expect former Chancellor Gerhard Schröder to play a role in Ukraine’s war. “I don’t know,” he said when asked if Schröder could be of any help. When the turbine was used for the Nord Stream pipeline, it could have acted. However, the serviced turbine is not yet ordered by the Russian side or imported into the country.
Scholz: No political influence at Warburg Bank
In the cum-ex tax case surrounding the Hamburg Warburg Bank, Scholz again rejected any liability. “There is no evidence that there was any political influence,” he said, referring to the extensive investigations of the past two and a half years. “I’m sure that perception will not change.”
When asked what he knew about the money in former Bundestag SPD member Johannes Kahrs’ safe deposit box, Scholz said, “Nothing.” He has no idea where the funds might come from, but he would like to know. According to reports from various media, more than 200,000 euros were found in the closet. Investigators made the discovery as part of research related to the Cum-Ex financial scandal.
Track progress “even faster”.
Scholz also emphasized that the federal government stands by its claim of a “progressive coalition.” Although they are three different parties, they “clearly agreed” to intensively promote Germany’s modernization. Despite the current crisis, Germany’s goal is to remain “a leading industrial country with technologies that can be exported worldwide in 10, 20 and 30 years”. The crisis even makes it necessary to pursue this objective “with more speed”. “Because I think it’s now very clear to everyone that we have to become independent from importing coal, oil and gas.”
The chancellor also declared that, despite the differences, he hopes that the government’s alliance will be maintained in the long term. The coalition will hold out for the four years of the current legislative period, he said. “I even have a perspective that goes beyond that, as I’ve said on several occasions.”
When asked if he missed his predecessor Angela Merkel (CDU), Scholz said: “I enjoy talking to her on the phone, but I also enjoy being chancellor.”