Germany's government waters down a cost-cutting plan that infuriated the country's farmers

The German government is watering down cost-saving plans that have infuriated farmers

BERLIN -- The German government on Thursday watered down cost-saving plans that have infuriated farmers, announcing that it is giving up a proposal to scrap a car tax exemption for farming vehicles and will stagger cuts to tax breaks for diesel used in agriculture.

The cuts were part of a package agreed last month by leaders of Chancellor Olaf Scholz's three-party coalition to fill a 17 billion-euro ($18.6 billion) hole in the 2024 budget.

Farmers staged a protest with tractors in Berlin and threatened more demonstrations this month, and even Agriculture Minister Cem Özdemir spoke out against the cuts being implemented in full. He said farmers have no alternative to diesel.

The budget revamp was necessary after Germany’s highest court annulled an earlier decision to repurpose 60 billion euros (almost $66 billion) originally meant to cushion the fallout from the COVID-19 pandemic for measures to help combat climate change and modernize the country. The maneuver fell foul of Germany’s strict self-imposed limits on running up debt.

A government statement Thursday said Scholz, Vice Chancellor Robert Habeck and Finance Minister Christian Lindner have now agreed to maintain the car tax exemption for farming vehicles in order to save those concerned “in some cases significant bureaucratic effort.”