Union and spd before exploratory talks – part 1: maternity pensions as a bargaining chip

Taxes, minimum wage, pensions, rents, health. The CDU/CSU and SPD will begin their exploratory talks on Friday. Which party will buckle on which issue?

The world seen through black and red glasses: Beautiful is different. Picture: reuters

Actually, the CDU/CSU wanted to continue governing with the FDP – and the SPD together with the Greens. Now, however, the two major parties must roll the dice for posts and content without a junior partner. An overview of the most important points:

Taxes

Union: It rules out any kind of tax increases. This explicitly applies to the top tax rate, inheritance tax and also all corporate taxes. The introduction of a wealth tax is also rejected. At the same time, however, the CDU/CSU wants to distribute benefits: For example, it wants to reduce the "cold progression" – and thus prevent wage increases from being taxed at a higher rate that only compensates for inflation. However, it is unclear how the CDU/CSU plans to finance this reform – especially since it is pushing to comply with the "debt brake," which prohibits the state from taking out new loans in the future.

SPD: It wants to raise the top income tax rate from the current 42 percent to 49 percent – from 100,000 euros for singles and 200,000 euros for married couples. It also wants to introduce a wealth tax, but with such high allowances that the "normal single-family home" is not affected. The final withholding tax on capital gains is to rise from the current 25 percent to 32 percent. Inheritance tax is also to be raised for rich company heirs, who until now often pay nothing at all.

Both: The CDU/CSU and SPD agree that they want to combat tax evasion. Both also want a financial transaction tax. Nevertheless, it would be uncertain whether these projects would actually be implemented. This is because the CDU/CSU could always fall back on the fact that both projects require European and international agreements.

Conclusion: Although the Union has so far ruled out any kind of tax increase, it will have to move. After all, the "debt brake" can only be adhered to if at least some taxes rise. One concession is already in sight: The CDU/CSU will abolish the "hotelier’s tax," which recently charged overnight stays at the privileged VAT rate of seven percent. This "hoteliers’ tax" was indeed an idea of the CSU, but it was always blamed on the FDP – and has pushed the Liberals into extinction. CSU leader Horst Seehofer wants to continue promoting his innkeepers, but the sister party, the CDU, is unlikely to want to be labeled the hoteliers’ patronage party and risk losing votes. UH

Minimum wage

Union: Unions and employers should be required by law to jointly set a collectively agreed minimum wage in a commission. The minimum wage may vary from industry to industry and from region to region, i.e. in structurally weak areas it may be as low as five or six euros. The CDU/CSU rejects a statutory minimum wage.

SPD: Wants a nationwide statutory minimum wage of 8.50 euros. In a section of the election program, which the Citizens’ Convention of the Social Democrats hefted into the program, an annual adjustment of the minimum wage to the increased prices is also demanded. A commission of the Ministry of Labor is to decide on the level.

Conclusion: Wait and see how much pressure the employers’ lobby exerts. The compromise line could be a nationwide statutory minimum wage that is below 8.50 euros – and does not include inflation compensation. The demand of the Citizens’ Convention, with which the SPD wanted to demonstrate grassroots participation, is likely to become a bargaining chip. MAR

Pension

Union: It wants to improve the "mothers’ pension." So far, mothers whose children were born before 1992 receive only one "cornerstone" pension. From 2014, there are to be two corner points, which would mean 330 euros per year. This program had been promised to the Women’s Union so that it would wave through the childcare allowance. The reform would cost 7.5 billion euros a year – for which no counter-financing is planned.

SPD: In its election program, it speaks vaguely of "appropriate" consideration of child-raising time.

Both: The CDU/CSU and SPD want to introduce a "minimum pension" of 850 euros a month. Beneficiaries must have 40 years of insurance.

Conclusion: Maternity pensions are likely to be sacrificed as a bargaining chip, because there has been no counter-financing so far. A "minimum pension," on the other hand, is likely to come, because it is a time bomb: The legitimacy of the pension insurance system is at risk if long-serving insured persons end up with a pension that is even lower than the Hartz IV rate. UH, OES

Rents

Union: The CDU/CSU wants to cap the rent when a new apartment is rented. The rent should then only be ten percent above the comparable rent. However, this only applies in areas with a tight housing market and not at all for new buildings. What is considered "tight" is to be decided by the federal states themselves. The CDU/CSU has no recipes for the expensive energy modernizations, which at the moment tenants alone pay for with high rent surcharges – on the contrary, it has made them even more expensive for tenants.

SPD: The SPD also wants a cap of ten percent, but for everyone. It wants to distribute the costs of energy modernization more fairly.

Conclusion: The CDU recently worsened tenancy law for tenants. So there is hardly any heart and soul in the demand for a rent cap for new leases. Nevertheless, it is likely to come – thanks to pressure from below, the numerous tenant demonstrations in recent times. Both parties have little to offer against the expensive energy modernizations. OES

Health

Union: The CDU/CSU thinks nothing of the citizens’ insurance that the SPD wants. It will oppose it.

SPD: That leaves the SPD primarily to argue about the health fund. The last grand coalition created it – as a compromise between the Union’s per capita flat rate and the SPD’s citizens’ insurance. Then, to the annoyance of the SPD, the coalition government developed it further: future cost increases must be borne solely by employees through additional contributions and taxpayers. Employers do not. That’s where the SPD wants to get in.

Both: The care reform is overdue, for example because the care of dementia patients is not secure. Nevertheless, there will be disputes. The question is: How much should contributions be allowed to rise?

Conclusion: The CDU/CSU will hardly leave the health ministry to the SPD – the ideas about the future of health insurance are too different. The coexistence of private patients and those with statutory insurance will continue for the next four years. Care reform will not be cheap, could amount to several billion euros a year. Insurance will become more expensive. HG

Part 2 with the topics "Energy", "Transport", "Family and Gender", "Migration" and "Europe".

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