IHK: Loss of confidence due to limited electricity tax reduction

The Saxon economy sees a loss of confidence due to the federal government's decision not to reduce the electricity tax for all citizens and companies. According to Saxony's chambers of industry and commerce (IHK), many companies have adjusted their business plans in reliance on the political promises and the high electricity costs are not only affecting industry.

"Trade, the hospitality industry, the logistics sector, numerous service companies and craftsmen can also have high energy price shares in their overall business costs and suffer massively from the energy price development," said Christoph Neuberg, spokesman for the state working group of Saxony's three CCIs.

The competitive pressure is particularly high in eastern Germany due to its proximity to its European neighbors the Czech Republic and Poland, the statement continued. "We cannot afford to be at a further competitive disadvantage. In the long term, this will lead to an exodus of economic output and thus to falling tax revenues."

The CDU/CSU and SPD leaders decided on Wednesday that the electricity tax should only be reduced for manufacturing companies and agriculture and not for all companies and private households. However, the CDU, CSU and SPD had announced this in the coalition agreement - albeit subject to financing.