Tax reform approved

The European Commission has given its approval to the German government`s ecological tax reform, ruling that it does not break European Union (EU) rules. The Commission had voiced concerns over plans by Germany to exempt certain energy intensive industries from the tax hikes.

Germany has increased taxes on electricity, heating fuel, petrol and other energy products to improve environmental protection. Certain industries, including agriculture and railways, are exempt from the rise.

The Commission ruled that the plans are in line with EU guidelines on state aid for environmental protection. The scheme will initially be approved for three years.