Merz Backs Electricity Tax Cut at CSU Congress

German Chancellor Friedrich Merz used a speech to the Christian Social Union (CSU) party congress in Munich on Saturday to press for immediate economic reforms and to back a cut in the country’s electricity tax, German news agency dpa-AFX reported. Merz insisted that the reform package set in motion in July be implemented quickly, and said he expects the Social Democrats (SPD), his coalition partner, to do the same.

Merz closed the two-day gathering of the Bavarian sister party of his Christian Democrats with a speech of just under an hour before about 700 delegates, according to dpa-AFX.

Economy under pressure

The chancellor framed the reform push as urgent. According to Izvestia’s English-language rendering of the speech, he told delegates the changes were needed “because our economy is under pressure,” and said Germany must update the economic and social foundations of the country so they remain reliable for decades to come.

Eastern Herald, citing Der Spiegel’s reporting, quoted Merz as saying the reforms were not needed at some point in the future: “we need them now.” The outlet reported that he put economic growth first, saying Germany needs companies that invest, a competitive industry, and must remain an industrial nation. Izvestia reported that he named competitive energy prices, faster administrative procedures and less bureaucracy as priorities, and said the cabinet faces difficult tasks on pensions, healthcare and social care.

Merz also acknowledged that many people are struggling with higher prices, both outlets reported. ZDFheute said he urged Germans to stop talking the country down, pointing to its strong Mittelstand of mid-sized firms and its skilled trades.

Electricity tax and energy costs

On energy, Merz said that if at all possible, and he believed it was, the electricity tax must come down so people have more money in their pockets, according to dpa-AFX. He reaffirmed the goal of lowering energy costs for all consumers in Germany next year, the agency reported.

The speech came against a soft economic backdrop. Eastern Herald, citing Deutsche Welle, reported that the ZEW economic confidence indicator fell to 28.1 in October from 34.7 in September. It added that Germany’s economy ministry has said growth temporarily lost momentum in the third quarter but remains on a recovery path, citing fading stockpiling after the Middle East crisis, high energy prices and low water levels on inland waterways.

Within the CSU, dpa reported that many members are bothered by the slow pace of reform, according to Eastern Herald. ZDFheute described the response in the hall as reserved, quoting one CSU lawmaker as saying delegates were applauding to give the chancellor courage.

What’s next

Merz said his conservative bloc would be judged on whether it succeeds in putting the reforms into practice, dpa-AFX reported. He called for the July package to be implemented swiftly and extended that expectation to the SPD. The sources did not give a timetable for the proposed electricity tax cut beyond the stated aim of lower energy costs next year.

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