German energy tax plan will hurt recovery – chem firms, union

28 July 2010 19:34  [Source: ICIS news]

TORONTO (ICIS)--Germany’s chemical producers and chemical union IG BCE on Wednesday sharply criticised a government plan to reduce breaks on energy taxes for the country’s manufacturers, including energy-intensive sectors such a chemicals.

The plan was a “poison” for the economy, coming just as the recovery was getting under way, said Utz Tillmann, general manager of Frankfurt-based chemical industry trade group VCI.

If the government’s latest draft proposal this week was realised, it would add some €300m ($390m) to chemical producers’ energy bills in the next two years alone, he said.

Germany is the only country that chooses to put additional burdens on its economy in the recovery,” he said.

Tillmann added that Germany-based chemical producers already paid very high prices for their energy supplies, compared with competitors in Europe, Asia and elsewhere.

Michael Vassiliadis, head of Germany’s chemical and energy union IG BCE said Berlin’s plan was “an attack” on the competitiveness and on jobs in energy-intensive sectors such as chemicals.

Vassiliadis said the government’s move was not motivated by improving environmental protection. Rather, Berlin was just focussed on raising money to cut deficits, he said.

The move to reduce the breaks was first put foward last month as part of an €80bn budget cut package by Chancellor Angela Merkel’s coalition government.

($1 = €0.77)

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