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The German government has drawn criticism from opposition politicians and trade unions for its plans to grant tax relief to skilled foreign workers, as part of a program aimed at reviving the economy.
Other measures include reducing red tape and encouraging people to work for longer before retiring, but it is the measures regarding overseas workers that have received the most attention.
"We are creating a tax rebate for foreign professionals during their first three years in Germany," said Federal Finance Minister Christian Lindner from Free Democratic Party, or FDP, which is part of Germany's coalition government and that has championed the proposal. "There will be rebates of 30 percent, 20 percent, and 10 percent for those people who come here as qualified specialists."
According to data from the Organisation for Economic Co-operation and Development, Germany has slipped from 12th to 15th place in the list of countries that are attractive to foreigner workers. Economics Minister Robert Habeck said similar measures had been successful in other countries, including the Netherlands and Austria, so they could be a win-win for Germany.
"If more skilled workers come to Germany because they want to work here or because they take advantage of these benefits, then we all win," he explained.
But Yasmin Fahimi, chair of the German Trade Union Confederation, called the suggestion "socially explosive", and it was also heavily criticized by politicians.
The Greens, who are part of the governing coalition, questioned whether it is constitutional for some groups to earn more than their colleagues for doing the same job.
Labor Minister Hubertus Heil, who is a member of Chancellor Olaf Scholz's center-left Social Democrat party, told national radio that the proposals "needed a closer look … we have to be careful that there are no public misunderstandings".
Julia Kockner, economic policy spokesperson for the center-right Christian Democratic Union, said the plan seemed like "discrimination against the country's residents". And the far-right Alternative for Germany party, which has enjoyed increasing success recently by making immigration policy a priority, called it "a slap in the face for hard-working German workers".
The FDP has been keen to give Germany's economy a jump-start for some time. Martin Wansleben, managing director of the Association of German Chambers of Industry and Commerce, has called the current business climate "poor for companies; for industry, it is even worse".
"Hopes in recent months that strong foreign business or a recovery in domestic demand could act as a driver for domestic companies have not materialized," he added.
However, one bit of more positive economic news comes in data from Germany's federal statistical office, showing that inflation fell by more than expected in June, after two consecutive months of going up. The rate was 2.5 percent, down from 2.8 percent in May.
Timo Wollmershaeuser, head of forecasts at the Ifo economic institute, said the underlying trend suggested that by August, inflation could fall below 2 percent for the first time since March 2021.
julian@mail.chinadailyuk.com
