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German minister says car tax plan looks doomed

Wed May 28, 2008 3:18pm EDT

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BERLIN, May 28 (Reuters) - Members of German Chancellor Angela Merkel's coalition remain "miles apart" on a plan to link car taxes to emissions and are unlikely to introduce the change in 2009 as planned, Transport Minister Wolfgang Tiefensee said.

Merkel came under criticism for backtracking on her environmental aims when the government announced last week that approval of the plan to change car tax rules to take exhaust emissions into account would be delayed.

She insisted over the weekend that the "Kfz" tax change, part of a climate protection package agreed by the coalition last year, was not dead despite differences in her government.

But Tiefensee, in an interview with Die Welt newspaper, suggested the plan was doomed and blamed Economy Minister Michael Glos for a "surprising reversal" on the issue.

"The chances of getting the Kfz tax in place from Jan. 1, 2009 are next to nil," Tiefensee told the newspaper in an article to be published in its Thursday edition. "We are miles apart in the coalition on this project."

Tiefensee, a member of the centre-left Social Democrats (SPD), said Glos and his party, the Christian Social Union (CSU), appeared reluctant to back the plan ahead of elections in their home state of Bavaria later this year.

Bavaria is home to big German carmakers like BMW (BMWG.DE) and Audi (VOWG.DE) (NSUG.DE).

The SPD and CSU rule in an uneasy coalition with Merkel's conservative Christian Democrats (CDU).

The package of climate proposals was due to be signed off in Merkel's cabinet on Tuesday, but the finance, economy and environment ministries were unable to reach a final agreement on the car rules.

Some of Germany's powerful states are also opposed to the plans. State opposition helped doom plans by the previous government of Chancellor Gerhard Schroeder to link car taxes to exhaust emissions.

(Writing by Noah Barkin)



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