Germany's coalition government has agreed fuel price relief for consumers and businesses worth 1.6 billion euros ($1.9 billion), ending a dispute over how to respond to an oil price surge triggered by
Germany's coalition government has agreed fuel price relief for consumers and businesses worth 1.6 billion euros ($1.9 billion), ending a dispute over how to respond to an oil price surge triggered by the Iran war.
The energy tax on diesel and petrol will be cut by about 0.17 euros per litre for two months, the conservative CDU party and its centre-left SPD coalition partners said on Monday.
The Iran war has caused the biggest disruption to global energy supplies on record, with plans for a U.S. blockade of Iranian ports and coastal areas further driving up crude prices.
The coalition dispute raised doubts about its ability to act decisively in a crisis, making Monday's deal an important show of political functionality for a government that had appeared at risk of paralysis.
Tensions on Friday over how to tackle soaring fuel prices revived memories of the infighting that plagued the previous government before its collapse in November 2024.
CUSHIONING THE IMPACT
"This war is the real cause of the problems we are experiencing in our own country," Chancellor Friedrich Merz said at a press conference.
He said the coalition was doing everything possible to cushion the impact of the conflict, which
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