16th Jun 2021

Energy commissioner sides with Merkel on nuclear tax

  • Germany's big business is against taxing nuclear plants (Photo: Wikipedia)

EU energy commissioner Guenther Oettinger over the weekend sided with German Chancellor Angela Merkel in what has become a heated debate over taxing energy companies which profit from extending the life of nuclear plants.

To the outrage of big energy companies, Ms Merkel wants to tax nuclear power plant operators in exchange for an extension of the plants' lifetimes, which under current legislation is to end in 2020.

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Mr Oettinger, himself a German politician from Ms Merkel's Christian Democratic Union (CDU), said he supported the idea.

"It's quite normal for nuclear groups to protest at the idea of a tax, but they should give the authorities a large part of the sizeable profits accruing from the (extended) operation of nuclear plants," he said in an interview with the Sueddeutsche Zeitung on Saturday, just as several big German companies signed a joint protest letter against the tax.

"I consider that at least 50 percent would be appropriate," Mr Oettinger added. His endorsement comes a month after Ms Merkel reportedly vented her anger at him after he missed an important meeting within the EU commission where Brussels decided to end coal-mine subsidies earlier than had been expected, taking Germany and others by surprise.

The proposed nuclear tax could generate €2.3 billion a year, a much needed source of revenue for the German budget, as the government in June signed up to €80 billion worth of cuts over the next three years.

But Ms Merkel's plan to tax the energy giants has angered her supporters in the big-business circles. In the joint letter, heads of energy giants E.oN, RWE, Vattenfall, along with other big companies such as Bayer, Metro and Deutsche Bank argued that the levy would "block important future investments."

"A lot is at stake: Securing our livelihood for tomorrow and Germany's future as a place of business. That concerns us all," said the letter, published as a full-page advertisement in major German newspapers and magazines over the weekend.

Traditionally CDU backers, the signatories referred to the letter as a "warning shot" for the government, Sueddeutsche reports. They also warned against a "precipitate exit from nuclear power", as it would "destroy" billions of euros of investment.

The center-right government pledged in 2009 to reverse the phasing out of nuclear energy agreed by the previous Green-Social Democratic coalition – a move initially welcomed by big business, until the tax idea came along.

In her weekly address on Saturday, Ms Merkel argued that keeping nuclear plants going for a longer period should foster the transition to an "age of renewable energy as quickly as possible."

Her spokesman played down the importance of the public protest letter, by saying it was a "completely legitimate contribution to the discussion" and that the chancellor had "no objection" to that.

Meanwhile, finding a majority for extending the lifespan of energy plants may prove difficult, as Ms Merkel's political support is waning even within her own party, Financial Times Deutschland writes. In addition, legal constrictions limit the extension to a maximum of 10 years.

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