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German Bundestag approves controversial diesel subsidy cuts

The vote on the spending plans follows months of deliberation

The vote on the spending plans follows months of deliberation

The German lower house of parliament, or Bundestag, approved the controversial rolling back of tax relief for diesel use by the German agricultural industry on Friday as part of the government's spending plans.

What's the significance of rolling back the diesel subsidies?

This proposal has angered German farmers, leading to nationwide protests in recent weeks. In Berlin, for example, some 10,000 farmers recently clogged the streets with their tractors, urging the government reverse its plans on tax diesel subsidies.

The budget financing law was put forward by the current governing coalition of the center-left Social Democratic Party (SPD), environmentalist Greens and business-focused Free Democratic Party (FDP).

Other measures apart of the law passed Friday include higher air traffic taxes and new rules on financial support for families.

In order for the law to be enacted, it will need to be approved by the Bundesrat, which represents Germany's 16 federal states. German Farmers' Association chief Joachim Rukwied suggested Thursday that the Bundesrat could put a stop to the law.

Later on Friday, the Bundestag also voted in favor of a 2024 budget after much delay.

The budget of around €477 billion ($519 billion) will include €39 billion in new borrowing.

Why was the 2024 budget delayed?

The German government's spending plans were first derailed in November, after the German Constitutional Court ruled that the coaltiion may not reappropriate €60 billion in unused credit made available during the COVID pandemic to a climate fund.

This ruling left the coalition in disarray, with member parties forced back to the drawing board regarding the country's financial plans.

The three parties could not agree on cuts to the budget after the court decision, with the FDP having a different approach to debt than its two partners. The SPD and Greens seek to take on more debt to boost the country's infrastructure, build more housing and tackle climate change, whereas the FDP wants to strictly adhere to constitutional debt limits.

wd/rt (AFP, dpa)

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