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German SPD mulls changes to eco-tax next year

German SPD mulls changes to eco-tax next year
\"The eco-tax will not be continued after 2003 in its current form,\" Michael Mueller, deputy head of the Social Democrats, told the Berliner Morgenpost newspaper, adding that if it was to be continued it must be closer linked to ecological goals. The energy tax has proven unpopular in Germany and with Social Democrat Chancellor Gerhard Schroeder seeking re-election in federal polls in September, some change to the tax looks likely. The energy tax was introduced in 1999, largely at the behest of the Social Democrats\' junior coalition partners, the ecologist Greens Party. The \"eco-tax\" on the consumption of electricity and extra tax on mineral oils was seen as a way of tackling the emissions of greenhouse gases associated with global warming. However, most revenues from the tax have been used to shore up Germany\'s creaking state pension system as the population rapidly ages and fewer young people enter the workforce. Klaus Toepfer, executive director of the United Nations Environment Programme, called on the government to keep the tax but use the income to combat global warming as it was originally designed for, not just prop up pensions. \"I\'ve backed the eco-tax for a long time,\" Toepfer told Tagesspiegel newspaper. \"It wouldn\'t be the worst thing if petrol prices rose a little bit but every citizen knew the money was being well invested in a more secure, peaceful world,\" Toepfer said. The tax has also proven controversial within the European Union, as it allowed a range of exemptions for industry to protect German companies that had to compete with firms from other EU countries where such taxes do not exist. The tax is a source of major irritation to opposition conservatives, whose chancellor candidate Edmund Stoiber promised to use \"all means necessary\" to get rid of the tax if he is elected. Stoiber later withdrew this promise as the shortfall in the state pension system would have been too immense. REUTERS NEWS SERVICE
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