EU seeks compromise over German ecotax plans
Date: 01-Feb-00
Country: EU
The Commission has been concerned that planned tax breaks under
Germany's ecological tax reform for gas-powered stations which produce
both heat and power could be illegal under EU competition rules.
Germany wants to give so-called "cogeneration" plants exemptions from
excise duties for a period of 10 years. But resistance from the
Commission has threatened to hold up the entire tax reform.
Spokesman Michael Tscherny said the Commission had now written to
Germany saying it was prepared to declare the rest of the tax reform
legal and discuss the cogeneration issue separately.
He said the Commission believed the tax exemption would represent an
illegal state aid, but the problem could be solved by instead paying
cogeneration plants a one-off investment subsidy.
This would be legal under special exemptions to EU competition rules for
environmental purposes.
Tscherny said the Commission was awaiting Germany's reply to its
suggestions, which it hoped would arrive by the end of the week.
