Germany Cuts Coal Subsidies

The two parties in Germany's ruling coalition have managed a compromise on support for the country's coal industry. Among the measures agreed on by the Social Democrats and Greens is the closure by 2008 of the Walsum coal mine near Duisburg. There were plans to mine under the river Rhine there. In addition, coal subsidies will no longer be paid every month, but retroactively at the beginning of the following year. According to the government, this measure alone will save €360 million euros of federal funds from 2006 to 2012. Potential savings in the medium term could be even greater as the rising price of coal will be taken into account when calculating payments. In November of last year, Chancellor Gerhard Schröder promised the coal industry total subsidies of €16 billion until 2012. The Greens had initially demanded an end to coal subsidies by 2010. The governments of Saarland and North Rhine-Westphalia still have to decide on how much they will support the coal industry in their states. The situation in North Rhine-Westphalia echoes that on the federal level, with the state's Greens pushing for a faster end to coal subsidies.