Parliamentary Digest 3rd July

A round up of what’s going on in the Bundestag, Bundesrat and state parliaments

This week was the last sitting week for Parliament before the summer break; a host of very significant laws were passed in both Houses.

Economic Stimulus Programme

The government has announced a 130 billion euro economic stimulus programme to help the economy recover from the effects of the corona crisis. In a specially-convened session on Monday, the Bundestag approved the changes, which came into force on Tuesday. The Bundesrat approved the measures a few hours later in a special sitting, and also approved the second supplementary budget which was passed in Cabinet on 17th June and was debated in the Bundestag on Thursday (see below).

The special meeting was necessary because the planned value-added tax cut was planned to come into force on Wednesday.

A reduction in VAT is intended to strengthen purchasing power: from July until the end of the year, VAT will be reduced from 19% to 16% and the reduced rate (which applies to many groceries and everyday goods) will be reduced from 7% to 5%.

Single parents payments will be increased from the current 1,908 euros to 4,008 euros over a period of two years (2020 and 2021).

Tax measures include postponing the due date of import sales tax to the 26th of the second month following the import, the possibility of offsetting crisis-related losses with profits from the previous year and changed depreciation rules.

The second major part of the stimulus package is a bonus of 300 euros for each child entitled to child benefit, to be paid in September and October.

Almost 13 billion tax losses will result from the reduction in VAT. The children’s bonus will cost 5.4 billion euros and the single parents relief allowance for and 415 million euros for. In 2021, the reduced tax revenue is expected to total around 12.84 billion euros.

The restaurant and catering trade will benefit doubly: the VAT rate for food has already been reduced from 19% to 7% from July 1, 2020 to June 30, 2021. The further, temporary reduction in VAT for the six months to the end of the year will also apply to them.

The opposition criticized the temporary tax cut as largely ineffective. It will entail “absurd bureaucratic effort” for the retail trade, while saving only just 30 euros a month for the average household, said the FDP parliamentary group leader Christian Dürr. The Left Party and the Greens doubted that the savings would really reach the consumer.

The Tagesschau reported that although there is no obligation for retailers to lower prices, many companies have already announced that they want to pass the lower tax rates on to customers, including grocery stores, bakeries, furniture stores, shoe stores and Deutsche Bahn. The Federal Association of Consumer Organisations said that it can be expected that the reduction will be passed on to consumers, particularly in competitive sectors such as food retailing and goods such as furniture or cars. Restaurateurs, who have been particularly hard hit by the Corona crisis, as well as other individual companies, have announced that they will not pass on the reductions or will not apply them to all products.

Second Supplementary Budget

The second supplementary budget was passed in the Bundestag on Thursday and the Bundesrat on Friday. In March, the first supplementary budget of 122.5 billion euros was approved; this second supplementary budget means an increase of 24,043 billion euros on the first supplementary budget and total expenditure of 509.3 billion euros in 2020.

Germany will take out loans totalling 218.5 billion euros this year to finance the necessary spending.

The Budget Committee considered the supplementary budget on Monday and Wednesday. In a statement to the Committee, the Federal Audit Office questioned whether the federal government’s planned net borrowing of 218.5 billion euros this year is compatible with the constitutional debt brake and criticised the federal government’s supplementary budget. The Auditors wrote that the draft would affect “essential constitutional principles such as annuality, due dates, truth and clarity” and argued that a significant reduction in net borrowing was “legally advisable and financially possible.” The auditors criticised the fact that, according to the draft budget, the federal government does not want to use its reserve of 48.2 billion euros accumulated in the financial years 2015 to 2019. But that was “constitutionally required”. A representative of Muncih’s Ifo Institute also suggested that the planned new debt be reduced. In order to ensure the sustainability of government finances in the long term, structural reforms such as extending working life would also have to be addressed.

Others saw no problem with the new debt. One felt that the economic stimulus package was “adequately dosed” to effectively support the economic recovery and rejected an alternative to net borrowing in the form of spending cuts or tax and duty increases which would destroy the economic stimulus.

The President of the Ifo Institute felt that the measures of the economic stimulus package are generally reasonable, although not too much should be expected: he said that the institute is predicting that the measures could trigger a growth impulse of 0.9 percentage points this year.

In the Bundestag debate, Christian Dürr for the FDP questioned the constitutionality of the supplementary budget and referred to the Federal Audit Office statement. He criticised the ‘mountain of debt’ and said that the government should use the reserve of 48 billion euros. Gesine Lötzsch for the Left Party criticized the fact that few of the planned measures were geared towards people living in poverty and proposed a minimum wage of twelve euros. The Green Party said the package contained too much present and too little future, and said that the economic stimulus package has a “social imbalance”. Peter Boehringer for the AfD criticised the supplementary budget as unconstitutional and said there is no emergency situation according to Article 115 of the Basic Law (the constitution).

Intelligence services

On Monday, the Parliamentary Control Committee took evidence from the heads of the federal intelligence services (the President of the Federal Intelligence Service (BND), Bruno Kahl, the President of the Federal Office for the Protection of the Constitution (BfV), Thomas Haldenwang, and the Persident of the Federal Office for the Military Shield Service (MAD), Christof Gramm).

BfV President Haldenwang said that there was an increased willingness to use violence in all areas of extremism and called right-wing extremism and right-wing terrorism the “greatest threat to security and democracy in Germany”. Potential perpetrators had increased by 33% in the past year to around 32,000 people. There has been an the increase in the number of violent people to 13,000, as well as a striking increase in anti-Semitic violence and right-wing extremist offences of around 17% each. There has also been a significant increase in militancy and a new quality in violent crimes against people amongst left-wing extremists. The increase in potential perpetrators is 4.7 percent. and the BfV rates 9,200 of these 33,500 people as violent. The “pseudo-intellectual style” in which left-wing extremist theorists like to dress cannot hide the fact that “hatred and agitation against people are preached here too”. Left-wing extremist crimes increased by almost 40 percent in 2019.

As far as the armed services are concerned, MAD President Gramm said that even though the vast majority of soldiers are in line with the constitution and even though right-wing extremism is not a new phenomenon in society and the Bundeswehr, there has been “a new dimension.” Suspected cases of right-wing extremism and Reichsbürger within the Bundeswehr had risen noticeably.

On Wednesday, the FT reported that a defence ministry report has proposed dissolving part of the country’s special forces and restructuring the elite military division, after some of its members were found to have radical rightwing sympathies.

Role of China

The EU-China summit, which was planned for autumn, has been postponed, but China is a subject of much discussion in parliament.

The SPD signalled a change in their policy towards China this week and marked a distance from coalition partners, the CDU, with a position paper which analysed China’s different functions today – partners, competitor, system rival – each of which has to be assessed differently. According to the SPD, the communist leadership is working against the democratic order – for example, the Hong Kong security law which came into force on Tuesday, the constant threats Beijing has made against Taiwan and the re-education camps for the Uyghur minority. The Tagesspiegel quoted deputy parliamentary group leader Gabriela Heinrich as saying, “You have to clearly recognise that with its authoritarian rule, the government and party apparatus of China is a system rival to our free democratic order. ” The party is concerned about the increasing hardening of relations between Beijing and Washington, and Heinrich said that, “A new bipolarity between the USA and China is not in our interest. Instead, we advocate pragmatic and future-oriented access: Germany, together with the EU partners, should work with China as a partner, who is also a competitor and, in basic areas, even a system rival.”

At a hearing of the Foreign Affairs Committee on Monday, experts and MPs discussed whether China is using its market power to assert interests in Europe – and whether a “decoupling”, or a return of supply chains outsourced to China in the course of globalisation ation, is appropriate or realistic. The director of the Mercator Institute on China Studies said the the Chinese leadership is concerned with “narrative dominance” as far as the corona crisis is concerned. However, said that the crisis had also shaken confidence in the ability of the leadership to solve problems. – the party leadership was less firmly in the saddle than is often assumed in the West, although China’s “foreign policy discourse power” should not be underestimated: “China is already a domestic political factor in Europe.” Others disagreed, arguing that coping with the corona crisis in China had strengthened self-confidence- The main threat , on the other hand, could be the US narrative of an “America First”, which was based on decoupling and a reversal in globalization.

A representative from the International Institute for Strategic Studies referred to China’s enormous industrial, security and military policy ambitions in areas such as robotics, aerospace technology, cyber and information technology and artificial intelligence. Countries like Germanys are seen as a “source of technology”, but Chinese industry is now independent in conventional fields. Chinese investments in German IT start-ups are remarkable.

The Federation of German Industries said that it is important for Germany and the EU to strengthen their own position – through European unity, more investment in their own competitiveness, through protection against market distortions, while the European Council on Foreign Relations representative emphasized that Germany is by far China’s largest trading partner within Europe. “In a European comparison, Germany is the most vulnerable.”

In an answer to a question by the Green Party this week, the government said that it expects the People’s Republic of China to assume international responsibility commensurate with its economic and political weight; international responsibility means strengthening the rules-based international order, as well as the rules-based trade order and its multilateral institutions. “The German government is therefore calling on the Chinese government to make an additional commitment to maintaining peace and security within the United Nations.”

Minimum wage

On Tuesday, the Minimum Wage Commission recommended that the government raise the general statutory minimum wage in four stages to 10.45 euros per hour by July 1, 2022 – a 12% increase. The commission has three representatives from employers’ organizations and three from trade unions. Due to the corona crisis, the wage is set to rise more slowly than had been anticipated.

Nord Stream 2 gas pipeline

Former Chancellor Gerhard Schröder, who is now the chairman of the supervisory board Nord Stream condemned the US sanctions against the construction of the Nord Stream 2 Baltic Sea pipeline between Russia and Germany at a hearing of the Committee on Economic and Energy. He also said that counter-sanctions may be necessary. Work on the largely completed second gas pipeline to Lubmin in Mecklenburg-Western Pomerania had to be stopped after the first US sanctions against the shipping companies and threat of new sanctions against all around 120 companies involved. The committee examined the issue of counter-sanctions and other ways of protecting European interests.

The SPD Minister of State at the Federal Foreign Office, Niels Annen, criticised the impending attack on EU sovereignty, but said that sanctions were the wrong way to go. The CDU Parliamentary State Secretary in the Federal Ministry for Economic Affairs and Energy, Thomas Bareiß, said it was a massive attack on energy sovereignty in Germany and Europe.

Elections to boards of foundations

The Alternative for Germany once again had four of its nominees for the boards of foundations rejected. The AfD regularly proposes controversial and provocative candidates and their candidates are regularly voted down.

Phase-out of coal

The Economy and Energy Committee cleared the way for the phase-out of coal by 2038 by voting for two amended laws to smooth the transition to the use of other energy sources. On Friday, the Bundestag and Bundesrat passed the package. The new law determines the schedule for the shutdown of the factories: by 2022, the share of coal-based electricity from hard coal and lignite is to be reduced to 15 gigawatts each. Further reductions will follow by 2030, to around eight gigawatt output for hard coal and nine gigawatt output for lignite. Public-law contracts to compensate power plants should be signed in the autumn, after a public hearing. Support will go to the areas affected by the coal phase-out – Lausitz, Central Germany and the Rhineland. 14 billion euros are to be paid directly to the federal states, and 26 billion are to be invested in projects via the federal government.

Basic Pension

After a long fight, the coalition has agreed to introduce the basic pension from 2021 – a supplement to people’s pensions where they are low, if the person has paid in for at least 33 years. Despite the CDU parliamentary leader saying the policy (an SPD policy) had no chance of becoming law, an agreement was reached between the coalition partners. The main argument was about financing – part of the cost was supposed to be financed by a planned financial transaction tax, but now the coalition partners have agreed to initially finance the basic pension from the federal budget.

On Wednesday, the Committee on Labour and Social Affairs approved the basic pension with the votes of the CDU / CSU and SPD.The AfD parliamentary group and the FDP parliamentary group voted against the law and the Left Party and the Greens group abstained. On Thursday, the bill was passed in the Bundestag.

The basic pension will affect around 1.3 million people and cost 1.3 to 1.6 billion a year. The Zeit reported that it is still unclear whether pension department, the Deutsche Rentenversicherung, will be able to manage the administration and that it is assumed that it will take until the end of 2022 to process all files.

We are spending so much money, so it must be possible to finance a basic pension, said Finance Minister Olaf Scholz on Thursday.

Electoral reform

This Bundestag, elected in 2017, is the largest ever, with 709 members (instead of the 598 designated by electoral law). After the 2021 election, there could be 850 MPs, or even more, and so there are currently discussions taking place about reform of electoral law.

The reason the number of seats change from election to election is to be found in Germany’s complicated electoral system. The Federal Republic has 299 constituencies.  At elections, voters have two votes: they elect their constituency MP with their first vote (direct mandate). The candi­date who wins the largest share of the vote in the constituency is elected. People choose a party using their second vote. Each party has a state list of candidates, and the parties are allotted seats proportionately to the second vote. In principle, half of the seats in the Bun­destag are distributed on the basis of the party lists, while the other half are con­stituency seats. However, this only accounts for only 598 of the current 709 seats.   The additional 111 seats were awarded on the basis of the overhang mandates (46 seats) and the balance mandates (65 seats). Over­ hang mandates occur when the number of constituency seats won by a party in a particular state exceeds the number of seats to which it would be entitled on the strength of the second vote.  In addition, since 2013 the effect of the overhang mandates has been offset by the allocation of addition­al seats –   balance mandates – which  ensure that the distribution of seats accurately reflects the proportional distribution of the second votes.

The Zeit reported in May that Interior Minister Horst Seehofer had rejected an SPD reform proposal to limit the Bundestag to 690 members by dropping the directly elected mandates in some constituencies. Seehofer said that this would be a “fundamental departure” from the German system of personalised proportional representation.  Now this week the CDU/CSU Union has reached its own proposal for reform, according to the Frankfurter Allgemeine: it envisages a moderate reduction in the number of constituencies from 299 to 280 for the Bundestag election in 2025 and the non-compensation of seven overhang mandates.

Law to combat right-wing extremism and hate crime on the Internet

On Friday, the Bundesrat approved the law to combat right-wing extremism and hate crime on the Internet, which the Bundestag passed on 18th June.

The law aims to improve the law enforcement of hate crime on the Internet. Social network providers will have to set up a system in the future to report criminal content to the Federal Criminal Police Office. The reporting obligation applies to content where there are concrete indications that a criminal offense has been fulfilled and which can have lasting negative effects on the exercise of freedom of expression on social media. Child pornography and the disparagement of the memory of deceased people must also recorded. The murder of the CDU politician Walter Lübcke in 2019 shows this kind of baiting on the Internet. Also punishable in the future will be the threat of dangerous bodily harm will also be punishable and the approval of crimes that have not yet taken place. Insulting statements made publicly, in a meeting or through the distribution of writings may be punished with a maximum of two years’ imprisonment. Anti-Semitic motives of perpetrators will be given special consideration when sentencing.

The Federal Criminal Police Office will be entitled to request the login IP addresses of authors of criminal Internet content from service providers.

Women and Covid-19

Motions from the FDP, Left Party and Greens about gender justice during the corona pandemic were rejected by the Family, Seniors, Women and Youth Committee on Wednesday. The motions pointed out that women were significantly more affected than men by the corona pandemic and the lockdown. Women do most of the care work, and work much more frequently in the health and care system or in food retailing, which are particularly exposed to major challenges during the pandemic.

The FDP called for the convening of an annual future summit on emancipation, which will examine the causes and effects of the corona pandemic on gender roles and develop proposals for countermeasures. The Left Part was is in favour of aligning the operation of social infrastructure with profit and return on capital for the common good and raising wages in the nursing professions, hiring more staff and reducing and regular working hours to 30 hours per week with full wage compensation. The Greens argued that all measures, aid packages and economic stimulus packages during the pandemic should be checked for gender equality by a staff unit to be created in the Federal Chancellery. This should also apply to all laws in the area of ​​labor market, social, tax and family policy.

The government expressed sympathy for the goal of achieving more gender equality, but criticized that the demands of the three opposition groups were excessive. The Alternative for Germany AfD said the demands were the expression of a “cultural Marxist gender struggle”. Instead of addressing the existential challenges of the greatest crisis in German post-war history, the left and Greens were once again more interested in minorities such as “queers and transsexuals.”

Equal working conditions for foreign employees

On Friday, the Bundestag approved the Bundestag’s decision to put the amended EU Posted Workers Directive into German law. This gives workers posted abroad the right to a minimum wage or to collective wages from generally binding collective agreements. Foreign employees will also be entitled to Christmas and holiday bonuses and more advice on their rights.

Baden-Württemburg ban on gravel gardens

The CDU/Green government in Baden-Württemburg has introduced a species protection law in the state. The law states that gravel gardens should be avoided in the interest of species protection and biodiversity. The government said that gravel gardens are actually already not permitted, but came into fashion because they were considered easy to care for. However, this form of garden design leads to the heating up of cities and endangers biodiversity, because insects and microorganisms cannot find food. Under the law, existing gravel gardens would have to be removed or redesigned. The law also stipulates that the use of chemical-synthetic pesticides should be reduced by 40 to 50 percent by 2030. The share of organic farming is to increase to 30 to 40 percent by 2030. From 2022 onwards, the use of all pesticides in nature reserves will be prohibited. Orchard meadows with a size of up to 1500 square meters are to be protected more strictly than before.

Change in head of Saxon Office for the Protection of the Constitution

On Tuesday, Saxony’s Interior Minister Roland Wöller announced that the head of the Office for the Protection of the Constitution, Meyer-Plath, would be placed. He gave no reason but said, “Extremism is an increasing threat to our democracy and our peaceful coexistence. In particular, the right-wing extremist attacks in Halle, Kassel and Hanau have shown what potential for violence and what hate is in our society….. “For this reason, early clarification by the Office for the Protection of the Constitution is becoming increasingly important.” The Spiegel commented that “Meyer-Plath, who had been head of the Office for the Protection of the Constitution in Saxony since 2012, has been criticized repeatedly in recent years. The police were apparently been surprised by the extreme right-wing riots in Chemnitz in 2018, ….Critics also accused Meyer-Plath of not focusing enough on right-wing extremist networks.” The next day, mdr reported that the new president, Dirk-Martin Christian, wanted information that the authority had collected about the AfD to be deleted.

Lockdowns in North-Rhine Westphalia

On Monday Minister President Armin Laschet spoke in the NRW parliament about the lockdowns in the state, affecting 600,00 people. He stressed that the lockdown after the corona outbreak at the meat processor Tönnies was carried in order to be sure that the virus would not spread into the community. He announced that the lockdown measures in Gütersloh are to be extended by one week until July 7th, while the other affected distict, the Warendorf district would have restrictions lifted on Wednesday. Laschet said that the virus has not spread to the rest of the population and there is therefore no increased risk of infection for the population in the two districts.

Calendar and information

Information about what is happening in the Bundestag on a daily basis (including in committees and parliamentary questions) can be found in the ‘Heute im Bundestag’ section of the Bundestag website (in German) here. The timetable can be found here and agendas and sittings under ‘Tagesordnungen und Sitzungsverlauf’ here.

The next sitting week for the Bundestag is 7th – 11th September

The next plenary session of the Bundesrat is Friday, 5th June. Information about the plenary sessions of the Bundesrat can be found here and information about its responsibilities here.

A political glossary can be found here.

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