Merkel defeated twice in upper house votes

CHANCELLOR ANGELA Merkel was dealt a double blow yesterday when the upper house of parliament, the Bundesrat, refused to back laws to cut taxes and solar energy subsidies.

Yesterday’s solar energy vote is especially embarrassing for Norbert Röttgen, federal environment minister and champion of the subsidy reform. He is running for state premier in tomorrow’s election in the western state of North Rhine-Westphalia, but is not expected to win.

After a run of state election defeats, Dr Merkel’s Christian Democrats (CDU) lack a law-passing majority in the upper house. Tomorrow’s vote, expected to return the state’s Social Democrat (SPD) and Green coalition, is unlikely to improve that awkward balance of power.

States led by SPD-Green governments voted down a €6 billion tax cut package proposed by Dr Merkel’s centre-right coalition, saying it was slanted towards higher earners.

The proposal now goes before a Bundesrat negotiating committee.

Dr Merkel’s government said the measure was designed to counteract the effect of inflation; it was scheduled to come on stream ahead of next year’s general election.

Revolt on the solar energy proposals was led by SPD-Green-governed states, particularly in eastern Germany, which have developed solar energy as a way to reverse regional economic weakness.

“The legislation in its current form would threaten Germany’s solar industry,” said Winfried Kretschmann, the Green Party environment minister in the south-western state of Baden-Württemberg, in the Bundesrat.

Lawmakers in the upper house agreed to renegotiate the deal which, in its original form, would slash by up to 40 per cent the guaranteed prices for selling on excess solar energy to electricity companies.

Meanwhile in the Bundestag the opposition SPD dismissed as “hot air” a six-point plan for European growth presented by foreign minister Guido Westerwelle.

Mr Westerwelle’s proposals, including reassigning unspent European funds, largely mirrored the initiatives of French president-elect François Hollande.