In the end, it looks like much ado about nothing. The early return to the full value-added tax rate on gas and district heating seemed to herald a new dispute within the German government coalition. It plans to raise the reduced rate, which was implemented during the energy crisis, back to normal levels at the beginning of 2024, three months earlier than planned.

This move will bring an additional €2.1 billion into the finance minister's coffers next year. It relieves his cabinet colleagues in the federal government from searching for further possible cuts in their budgets. After initial strong resistance, even the SPD parliamentary leadership has now signaled openness to this operation. After all, the decision was made in conjunction with the 2024 budget law in the cabinet and with the consent of Chancellor Olaf Scholz (SPD). The faction has only just chosen the path of peace.

However, this is not the only reason why the early step is the right one. Energy prices have normalized faster than expected after the shock of the Russian gas supply stoppage. The reason for the tax subsidy has disappeared, so this furtherance should be removed as well. It is also correct that the overall high energy prices have become a key issue for the economic location of Germany. Concerns are therefore justified.

Nonetheless, it is not enough to cling to individual measures or demand a flat industrial electricity price. The content matters. The government's taxation, exemption, and subsidy of energy are highly opaque. That also applies to the effectiveness of these measures. The electricity tax alone generates nearly €7 billion per year. So far, energy-intensive industries have been exempt from this tax through the so-called "Spitzenausgleich." It is set to end in 2024, and companies will have to shoulder an additional €1.7 billion. The industry rightfully laments this as the wrong timing. At the same time, the supplementary budget for the "Climate and Transformation Fund" for next year includes €2.6 billion for electricity price compensation. None of this fits together.

A turning point is needed. Before an industrial electricity price is introduced, the electricity tax, which was presented by the Social Democratic Party and the Green Party in 1999, should be reevaluated. As a steering instrument, it has long been outdated due to the CO2 tax. More clarity is necessary in the mishmash of government intervention and subsidies. Only a coherent concept can serve both purposes: securing the economic position and achieving climate neutrality.