IGBCE Chairman Vassiliadis: Union leader wants wealth tax for infrastructure

Michael Vassiliadis has headed the Industrial Union of Mining, Chemicals and Energy ( IGBCE ) since 2009 – but he has never been as worried about Germany as he is now: “The pressure is greater than ever, I have never experienced it like this before,” said Vassiliadis on Friday during a visit to the FAZ newspaper. As quickly as possible and within six months at the latest, a new federal government, “whatever it may look like,” must support the economy with a “stringent industrial policy.” At the same time, Vassiliadis reiterated his proposal to impose a one-off wealth tax on the richest one percent of the population – including many entrepreneurs.

According to the IGBCE boss, around 85,000 people with assets of at least ten million euros would be affected. They would have to pay five percent of their respective assets into an infrastructure fund. According to Vassiliadis, this would raise 175 billion euros for the fund. There would be no fear of capital flight with a one-off levy of five percent, he said. In addition, the funds would be used to finance infrastructure projects, which would also benefit companies. With his initiative, he wanted to contribute to more distributive justice without triggering "a huge discussion about tax law," said the union representative. This is why calls for a reintroduction of the wealth tax or a reform of the inheritance tax have repeatedly failed.

Vassiliadis advocated pragmatic solutions with regard to energy costs. Instead of building new gas-fired power plants on a large scale, which would ultimately only be used for a few days a year during so-called dark periods, it would be better to use existing coal-fired power plants as a capacity reserve, said the union representative. These too would rarely be needed as renewable energies are expanded - if emissions from short-term operation were then captured, the CO2 captured and stored underground, "that would save billions" compared to building new gas-fired power plants.

The uncertainty about whether the capture and storage of carbon dioxide - the so-called CCS technology - is possible in Germany and when there will be sufficient green electricity for the electrification of production and mobility is preventing investments: "These are all irritations that contribute to companies saying: 'We're not doing that here.'" The fundamental questions about the future of energy supply must be clarified, otherwise the _CO2 price will not work as an incentive to decarbonize production: "It is supposed to increase the costs of fossil fuels and push companies into green electricity, but if there is not enough green electricity, you end up just pushing them out."

The competitive disadvantage for energy-intensive companies that produce in Germany is exacerbated by the fact that energy costs in the USA have fallen sharply as a result of the expansion of gas production through fracking. "The Americans are swimming in gas." On top of that, Chinese producers are increasingly pushing into the world market due to the slowdown in growth in the People's Republic: "For the first time, basic chemicals from China are landing in Rotterdam." This is endangering production in this country: "In the particularly energy-intensive basic chemicals sector in Germany, 20 percent of capacities and jobs will be lost if politicians do not finally take decisive action." In the Rhine-Main area, the chemical industry is still relatively stable, also due to the large share of the pharmaceutical sector.

He does not believe that everything has to be produced in Europe, said Vassiliadis. "But security also means that we can provide ourselves with certain things." Germany must drive the debate on this in the EU. In addition to a general reduction in energy costs, the IGBCE boss believes that politicians should also "directly subsidize individual strategic areas."