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ECONOMY

TV licence fee reform will hurt businesses, experts warn

The planned reform of Germany’s unpopular GEZ broadcasting licence fees could heavily burden businesses, industry experts warned on Monday.

TV licence fee reform will hurt businesses, experts warn
Photo: DPA

Over the summer, Germany’s 16 states agreed to overhaul the system funding public TV and radio. But what was intended to be a simplification could cost some companies and households up to double the fees they paid previously, the president of the German Chambers of Industry and Commerce (DIHK) said.

“In cases of doubt the economy would have to pay up to double as much as before,” Hans Heinrich Driftmann told daily Neue Osnabrücker Zeitung. “It will hit some, such as chain stores, particularly hard.”

In an example, Driftmann explained that a drugstore chain with 23,000 workers and 1,150 stores would have to pay up to half a million euros per year in GEZ fees, but a single-location business the same size would pay just €32,000.

“We can’t accept that,” the DIHK president said.

Meanwhile Otto Kentzler, head of the German Confederation of Skilled Crafts (ZDH), told daily Passauer Neue Presse that it was unacceptable for “numerous businesses to be in danger of paying two, three or even six times as much as before.”

Already German businesses provide some €450 million in GEZ fees to finance the public broadcast system, he said, saying this made up about six percent of the organisation’s entire earnings.

The new GEZ fee model, set to begin in 2013, would charge a per-household fee for private television and radio owners. Businesses would also no longer pay per device, with fees being based on their number of employees, locations and vehicles.

The Cologne-based GEZ stands for the mouthful Gebühreneinzugszentrale der öffentlich-rechtlichen Rundfunkanstalten in der Bundesrepublik Deutschland, or “Fee-collection Centre of Public Broadcasting Institutions in the Federal Republic of Germany.”

The organisation requires a licence of some 42.5 million owners of televisions, radios and, for the past few years, even computers and mobile phones that access the internet. The fee money funds public broadcasters such as ARD and ZDF, and is often collected by plainclothes officials who go door-to-door busting fee-shirkers.

It’s a difficult task for the organisation’s 1,100 employees, and consumers frequently bring cases against the GEZ to court. The 2013 reforms are meant to relieve families of high fees and reduce internal costs.

DAPD/ka

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ECONOMY

How is Denmark’s economy handling inflation and rate rises?

Denmark's economy is now expected to avoid a recession in the coming years, with fewer people losing their jobs than expected, despite high levels of inflation and rising interest rates, The Danish Economic Council has said in a new report.

How is Denmark's economy handling inflation and rate rises?

The council, led by four university economics professors commonly referred to as “the wise men” or vismænd in Denmark, gave a much rosier picture of Denmark’s economy in its spring report, published on Tuesday, than it did in its autumn report last year. 

“We, like many others, are surprised by how employment continues to rise despite inflation and higher interest rates,” the chair or ‘chief wise man’,  Carl-Johan Dalgaard, said in a press release.

“A significant drop in energy prices and a very positive development in exports mean that things have gone better than feared, and as it looks now, the slowdown will therefore be more subdued than we estimated in the autumn.”

In the English summary of its report, the council noted that in the autumn, market expectations were that energy prices would remain at a high level, with “a real concern for energy supply shortages in the winter of 2022/23”.

That the slowdown has been more subdued, it continued was largely due to a significant drop in energy prices compared to the levels seen in late summer 2022, and compared to the market expectations for 2023.  

The council now expects Denmark’s GDP growth to slow to 1 percent in 2023 rather than for the economy to shrink by 0.2 percent, as it predicted in the autumn. 

In 2024, it expects the growth rate to remain the same as in 2003, with another year of 1 percent GDP growth. In its autumn report it expected weaker growth of 0.6 percent in 2024.

What is the outlook for employment? 

In the autumn, the expert group estimated that employment in Denmark would decrease by 100,000 people towards the end of the 2023, with employment in 2024  about 1 percent below the estimated structural level. 

Now, instead, it expects employment will fall by just 50,000 people by 2025.

What does the expert group’s outlook mean for interest rates and government spending? 

Denmark’s finance minister Nikolai Wammen came in for some gentle criticism, with the experts judging that “the 2023 Finance Act, which was adopted in May, should have been tighter”.  The current government’s fiscal policy, it concludes “has not contributed to countering domestic inflationary pressures”. 

The experts expect inflation to stay above 2 percent in 2023 and 2024 and not to fall below 2 percent until 2025. 

If the government decides to follow the council’s advice, the budget in 2024 will have to be at least as tight, if not tighter than that of 2023. 

“Fiscal policy in 2024 should not contribute to increasing demand pressure, rather the opposite,” they write. 

The council also questioned the evidence justifying abolishing the Great Prayer Day holiday, which Denmark’s government has claimed will permanently increase the labour supply by 8,500 full time workers. 

“The council assumes that the abolition of Great Prayer Day will have a short-term positive effect on the labour supply, while there is no evidence of a long-term effect.” 

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