Among the measures to ease the immediate pressure are a temporary reduction of the mineral oil tax by 17 cents per liter for two months, and the option for companies to pay their employees a tax-free “relief bonus” of up to €1,000.
“The strain over the past few weeks has been unbearable for many people — unbearable for small and medium-sized businesses, but also for individual citizens,” said Markus Söder, the leader of the Bavarian conservatives. “Daily reminders that prices are going up, like at the gas pump [have caused] a sense of powerlessness, anger, and a real heavy burden … We are acting against this.”
Merz’s government had hoped to revamp the EU’s biggest economy this year, but the fallout of the war in Iran could significantly hinder that prospect. The German economy shrunk in 2023 and 2024 following Russia’s full-scale invasion of Ukraine. Last year, the country’s gross domestic product grew by just 0.2 percent.
Bärbel Bas, one of the co-leaders of the SPD, pointed to the need to become more resilient.
“It is also important that we become less dependent on others,” she said. “That was also a discussion we had — that we need to make ourselves stronger so that we can withstand everything else around us that we have little control over.”
Péter Magyar’s victory in Hungary would make it easier for the European Union to act swiftly and in a united way over the coming months, she added.