German Economy Minister Robert Habeck’s plan to phase out tax relief for foreign workers has drawn explosive criticism from across the political spectrum, with arguments that it discriminates against German nationals.
He German government has made known his expected preliminary budget plansafter months of political controversy that have threatened to topple Chancellor Olaf Scholz’s ruling coalition.
Within Germany, one proposal sparked more controversy than others, as Habeck’s idea of tax relief for foreign skilled workers to end Germany’s skills deficit was criticized by a wide range of parties.
Habeck suggested that the tax relief he would offer to skilled foreign workers a 30% tax reduction, which would decrease to 10% after three yearswould encourage the arrival of qualified foreign workers To Germany.
The Minister of Economy justified his proposal by saying that was successfully applied in other countries, such as Austria and the Netherlandsand that: “If more skilled workers come to Germany because they want to work here or because they take advantage of these advantages, then we all win.”
However, The idea has been harshly criticized by other partieswhich they claim favors foreigners to the detriment of German citizens.
The economic policy spokesperson of the Christian Democratic Union (CSU)Centre-right activist Julia Kockner said the proposal amounted to “discrimination against residents of the country”.
CSU general secretary Martin Huber also criticized the plan, telling the tabloid Bild that the “preferential tax treatment” was “scandalous.”
He far-right party Alternative for Germanywho has made the fight against immigration and German nationalism central messages of his campaign, called the idea “slap in the face of German workers“.
Susanne Ferschl of the Left Party said the policy gave foreign skilled workers preferential treatment over other immigrants in Germany, and that could contradict the quality principle enshrined in the German Constitution.
Germany needs foreign workers to remain competitive
The president of the German Trade Union Confederation, Yasmin Fahimi, went so far as to describe the idea as “socially explosive“.
Germany has been gradually falling from 12th to 15th place on the list of attractive countries for foreigners, according to the Organization for Economic Cooperation and Development (OECD).
The shortage of skilled labor in key sectors it would cost the German economy 29 billion euros, according to the German Economic Institute, and losses would have multiplied tenfold since 2010.
Habeck maintained that the plan had worked in other countries such as Austria and the Netherlands and that, therefore, could be successfully used by Germany to solve the problem of shortage of qualified personnelstating that “it is worth trying” to encourage qualified foreigners to come to Germany.
The budget, approved last Friday, was close to cause the political collapse of the coalition in power, since the three ruling parties tried to find a balance between not exceeding the Germany’s constitutional debt limit and commit to an increasingly necessary expense.
Other controversial aspects of the draft plan are the limitation of spending on defense and European securitywhich seems to lead Germany to new confrontations with its international partners, which They have already accused the country of not contributing enough to Ukraine.
The German government coalitionformed by the center-left Social Democratic Party, the neoliberal Free Democratic Party and the center-left Green Party, is increasingly unpopular.
In the recent european electionsthe ruling parties were overtaken by the center-right CDU and individually by the far-right AfD party, whose members have been marred by a series of scandals.
