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German industry divided over planned fuel tax cuts

German think tanks and trade bodies are split over whether government plans to slash taxes on petrol are likely to be a help or a hindrance.

Published: 24 March 2022 17:14 CET
A taxi driver fills up his car at a Berlin petrol station.
A taxi driver fills up his car at a Berlin petrol station. Photo: picture alliance/dpa | Carsten Koall

In an energy relief package announced on Thursday, the traffic-light coalition said it would support car owners with drastic cuts to energy taxes on fuel.

The tax cuts will see energy levies slashed to the minimum level allowed under EU competition laws, which equates to around 14 cents per litre of diesel and 30 cents per litre of petrol.

Currently, energy tax adds around 47 cents to a litre of diesel and around 63 cents to a litre of petrol, meaning drivers could see the prices of both go down by around 30 cents per litre. 

The move is likely to be welcomed by the ADAC motorists’ association, who have been complaining of the high fuel prices in recent weeks.

But other commentators have suggested that plans could have a negative effect on energy use and encourage drivers to use more fuel. 

The IfW think tank said they welcomed the government’s push to mitigate the price shocks, particularly for poorer households, but warned that the fuel tax reduction “lowers the incentive to save energy”.

Meanwhile, Germany’s Chambers of Industry and Commerce (DIHK) called the temporary tax cut a drop in the ocean, and said more targeted help was needed to support businesses.

“The historically high electricity and energy costs are threatening the survival of many German firms,” DIHK chief Peter Adrian said.

Industry under investigation

The prices of natural gas and oil have been rising steeply in recent months due to supply issues and the impact of the war in Ukraine.

But the government believes that some petrol stations and other energy companies may be using the current situation as an excuse to hike prices and accrue larger profits.

Economics Minister Robert Habeck (Greens) has argued that some large petrol station brands could be making “war profits” due to their powerful positions within the market. 

In order to rule this out, the government wants to leverage antitrust and competition laws to ensure that lower taxes and falling commodity prices are passed on to the end consumers.

This will involve giving greater powers to the Federal Cartel Office to ask for company data and investigate potential profiteering. 

The fuel price cut was just one of several measures revealed by the government on Thursday, with consumers also in line for cheaper transport tickets, an energy allowance and a child bonus for families.

READ ALSO: Cheap transport and tax cuts: What Germany’s energy relief package means for you

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GERMAN CITIZENSHIP

How much do you need to earn to qualify for citizenship in Germany?

Applicants for German citizenship need to be able to support themselves financially, but it's often unclear what that means in practice. Here's how to work out if your income is high enough for citizenship.

Published: 15 May 2024 15:29 CEST
How much do you need to earn to qualify for citizenship in Germany?

Out of the requirements for qualifying for a German passport, supporting yourself financially is one of the most important – and one of the most confusing.

Many foreigners assume that the authorities have a magic number in mind and will often worry about whether their income is above or below this threshold.

In reality, though, the law is much more flexible. In section 10 of the nationality law, it states that applicants must show that they “can support themselves and their dependent family members without claiming benefits under the Second or Twelfth Book of the Social Code.”

In other words, that your income is healthy enough to not rely on the state for things like long-term unemployment benefits.

According to Fabian Graske, an immigration lawyer at Migrando, around €1,500 gross per month for a single person is usually considered enough to live on. 

That said, there isn’t really a one-size-fits-all approach to this quesiton. 

When it comes to working out if your income is high enough, you’ll need to take into account a number of factors that your case worker at the naturalisation office will also weigh up. 

That’s why it’s important to ask yourself a number of questions that go beyond just how much you earn: 

How high are your living costs? 

In Germany, there are huge regional differences in the cost of living, so what someone can afford to live on varies hugely from place to place.

For example, someone living in pricey Munich is likely to need much more money for rent or their mortgage than a resident of much more affordable places like Halle or Leipzig, so you should consider whether what you earn is enough to offer a basic standard of living in the city or town you live in. 

READ ALSO: Requirements, costs and permits – 6 essential articles for German citizenship

It is worth mentioning, though, that what you actually pay for rent and bills matters more than the averages. If you’re lucky enough to find an apartment with unusually low rent in Berlin, for instance, you can probably get away with earning less money as well. 

Are you single or do you have a family?

If you’re single and have no children, you’ll likely get a lot more lenience from the authorities when it comes to having a lower-than-average income.

A family sit at a lake.

A family sit at a lake in Bavaria. Image by Eva Mospanova from Pixabay

Of course, if you have dependents such as kids or a spouse who doesn’t work (or both), you’ll need to ensure not only that your own living costs are taken care of, but also that your family can survive on your income alone.

That naturally means you’ll be expected to earn a certain amount more for each dependent child or adult.

On the plus side, any income your spouse does earn will be counted alongside your own, so if you’re the one who is supported by their partner, the authorities will also take this into account. 

Is your job stable or unstable?

One key thing to think about when applying for citizenship is the security of your work contract. Someone who has a long-term contract with an employer and has passed their probationary period will be in a much better position than someone who is still on a three-month trial, for example.

This doesn’t mean you shouldn’t submit a citizenship application after just starting a new job, but be aware that the authorities may well wait to process your application until you’ve passed the initial probation and have been put onto a longer-term contract. 

A similar rule of thumb applies to people who are currently claiming Arbeitslosengeld I (ALG I), or unemployment insurance. Though this doesn’t disqualify you from citizenship, it may delay your application until you can find a stable job. 

READ ALSO: Can I still get German citizenship after claiming benefits?

Do you need to rely on welfare payments to get by?

A key aspect of German naturalisation law is working out whether you’re likely to be a financial burden on the state by relying too much on the welfare system.

The entrance to the Jobcenter in Düsseldorf,

The entrance to the Jobcenter in Düsseldorf, North Rhine-Westphalia. Photo: picture alliance/dpa | Oliver Berg

While everyone needs a helping hand from time to time, claiming benefits like long-term unemployment benefit (Bürgergeld) or housing benefit (Wohngeld) to top up your income sadly shuts you out of the naturalisation process and could also make it hard for you to qualify in the future. 

Luckily, this doesn’t apply to all types of state support – Kindergeld, ALG I and Bafög don’t count, for example – so seek advice from a lawyer or your local citizenship office if you’re unsure.

How old are you?

Though this is hard to fully quantify, age can sometimes play a role in assessments of your financial fitness in Germany.

A young person fresh out of university or vocational college may be seen as someone with high earning potential over the years, so in some cases the authorities may take a more relaxed approach to their current income.

In contrast, an older person coming to the end of their working life could be held to slightly stricter standards. 

This is also why it can be important to show that you have sufficient pension contributions or another form of security for the future, such as owning your own home or having lots of savings. 

READ ALSO: How can over 60s get German citizenship under the new nationality law?

What counts as ‘income’ under German law?

It’s important to note that income doesn’t just have to mean the salary you get at your job: income from rental properties, side hustles and freelance gigs can also be included, as well as things like alimony payments after divorce.

Once again, if you’re unsure, just ask. The citizenship offices are there to advise you and should give you clear instructions about what kind of documents count as proof of income in your application. 

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