Germany Is Cutting the Tax on Gasoline and Introducing Employer Bonuses-The Package Will Cost €1.6 Billion

Chancellor Friedrich Merz’s coalition has agreed on a €1.6 billion package of measures aimed at cushioning German consumers from the effects of a sharp rise in fuel prices.

The measures include a 17-cent-per-liter cut in the gasoline tax for two months, the chancellor said on Monday after weekend talks among party representatives. In addition, a tax-free employer bonus of up to €1,000 will be introduced this year.

“We cannot remove all the uncertainty caused by global upheaval—so this measure is temporary,” Merz told reporters in Berlin.

The coalition is facing pressure to curb the rise in fuel prices in the short term while simultaneously negotiating a broader reform package and substantial budget cuts, and trying to revive a stagnant economy.

It also emerged on Friday that coalition representatives had been considering expanding tax relief for commuters and cutting energy levies.

Germany Is Cutting the Tax on Gasoline and Introducing Employer Bonuses-The Package Will Cost €1.6 Billion

The Measures Are Temporary: Merz Acknowledged That It Is Impossible to Eliminate All the Consequences of Global Turmoil