German coalition dilutes 2024 subsidy cuts after farmer backlash

BERLIN (Reuters) – Germany’s coalition has agreed to change its 2024 budget plans, a government spokesperson said on Thursday, after subsidy cuts proposed to bring spending in line with debt rules angered farmers.

The controversial abolition of tax breaks for farmers will not happen in one swoop, the spokesperson said.

Instead, tax concessions for agricultural diesel will be reduced by 40% this year, then by 30% in 2025 and a complete end to the subsidy from 2026.

The planned abolition of the tax break prompted hundreds of German farmers to protest in central Berlin last month.

German Chancellor Olaf Scholz’s three-party coalition announced in December an agreement on the key points of the draft budget for 2024 following weeks of negotiations.

The agreed changes to the 2024 draft budget announced on Thursday, which also impact a plastic levy and funds for the national railway, will result in 2.5 billion euros ($2.7 billion) less in savings than initially anticipated, said the government spokesperson.

($1 = 0.9137 euros)

(Reporting by Maria Martinez,; Writing by Rachel More,; Editing by Miranda Murray)