Germany wants to use the super profits of companies, Bercy tries to mine

Germany wants to use the super profits of companies, Bercy tries to mine

Germany wants to use the super profits of companies, Bercy tries to mine

German Chancellor Olaf Scholz on 4 September 2022 in Berlin.

The political debate on super-profits is spreading to several European countries. Germany wants the tremendous profits made by some energy companies from soaring market prices to be used to ease the family’s bills, Chancellor Olaf Scholz said on Sunday 4 September.

In the document presenting a new massive inflation aid plan, the German government makes it known that it will ask for a measure “partial withdrawal of random profits” of these companies is implemented within the European Union, but is ready to act at national level. “Producers simply take advantage of the very high gas prices that determine the price of electricity”the Chancellor complained at a press conference.

Read also: Article reserved for our members Taxes on super-profits: “How to reconcile fiscal equity and social equity”

“Controversial idea”

The reform wanted by Berlin, however, differs from the taxation of exceptional profits made by energy groups, decided by some governments in Europe, underlined the Minister of Finance, Christian Lindner. The government discussed it “controversial idea” but “There are constitutional reservations about this”, added the leader of the liberals, strongly opposed to the principle of a tax. On Sunday she explained that she was not “not a source of income that can be planned and that allows you to organize a quick relief” household bill.

If the word tax is not used, it should in fact be a mandatory contribution imposed on companies in the energy sector aimed at reducing the price of electricity paid by households and businesses. This mandatory contribution could pay off “several tens of billions of euros”said the finance minister.

In mid-July, Spain had already announced a tax on the extraordinary profits of large energy and financial companies. Previously, Italy and the UK had introduced a tax on the profits of the oil and gas giants.

Read also: Article reserved for our members Italy, Spain … These countries that tax superprofits

The contribution “is not subject to taxation,” according to Bercy

The French Ministry of Economy estimated on Sunday that the “contribution” the energy companies that Germany promised to support at the European level were not ” absolutely not “ a fee, in a message sent to reporters. “Germany introduces a mandatory contribution from companies that benefit from the price of gas while producing electricity from coal, nuclear or renewable energy”let’s say in Paris.

“This is exactly what France is doing with renewable energies or in another way [l’énergéticien] EDF by increasing the volume of Arenh [accès régulé à l’électricité nucléaire historique]judge Bercy. “The mechanisms are not necessarily the same, but the logic is. (…) and it has nothing to do with taxation.the ministry tried to argue, while since this summer in France there have been calls to tax the exceptional profits of large companies such as TotalEnergies or CMA-CGM.

Invited to LCI at the end of the afternoon, European Commissioner for the Internal Market Thierry Breton was in favor of “the use of exceptional resources, and in particular rents” for “limiting the impact of inflation on both individuals and businesses”.

But he insisted on the importance of limiting the scope of this contribution to “artificial boosts that some energy players have been able to achieve”. “In France I have the impression that we have extended (the idea of ​​taxing the” super profits “) To the entire economic sector, it seems to me a bit risky or even risky”argued the commissioner.

If the European discussions fail, Berlin says it is ready to go it alone by adopting a measure at the national level.

“Shield system” maintained in 2023, assures Attal

In France, the idea of ​​taxing the super-profits of multinationals is firmly opposed by the Minister of Economy Bruno Le Maire, while the Prime Minister Élisabeth Borne does not. “do not close the door” last resort.

Before Bercy communicated, MEP Manon Aubry (La France insoumise) was happy on Twitter if it is “Germany’s turn to tax super profits”. “False again! “replies Bruno Le Maire on the social network. “Germany has decided to establish a mandatory contribution from energy companies, which already exists in France and which brings several billion euros”.

Bercy is due to present its draft budget for 2023 in the coming days, which will detail the government’s strategy to fight inflation, especially energy. While the gas price shield is expected to expire on 31 December 2022, Public Accounts Minister Gabriel Attal assured France Inter on Saturday that a “shield system” it would remain in 2023. However, the percentage increase in energy prices remains to be defined. Gabriel Attal said in an interview with Le Parisien on Saturday that a 10 to 20% increase was a “possibility”.

Diversification of supply sources

Bercy’s reaction comes just hours after Germany presented a 65 billion euro plan to mitigate the effects of inflation. In fact, in August, price increases in Germany reached 7.9% in one year.

Germany, like all EU countries, is faced with soaring electricity prices and fears over its energy supply due to the drying up of Russian gas, on which its industry is particularly dependent. Despite the prolonged closure of the Nord Stream gas pipeline linking Russia to northern Germany, the country “Will be able to face this winter”assured Chancellor Scholz.

“Russia is no longer a reliable energy supplier (…). The federal government has been preparing for this eventuality since the beginning of the year.the leader specifies, underlining that thanks to the diversification of supply sources, the re-commissioning of coal-fired plants and the filling of gas stocks, the country is able to face the months to come.

Read also: Where does the notion of “super profit” come from and what does it really mean?

The world with AFP

Leave a Reply

Your email address will not be published.