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German report German report
by Euro Reporter
2010-12-11 09:48:36
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Extension of coal subsidies

Germany has won its battle to ensure that state subsidies to loss-making coal mines can continue until 2018, rather than a 2014 cut-off date proposed last summer. Under a deal formally approved by industry ministers on Friday, it will be possible to give public aid to coal mines up until end-2018 “with a view to facilitating their closure”.

Aid will, however, have to decline in the years running up to 2018 and countries giving such aid will have to provide a plan to mitigate the environmental impact of the coal production. The European Commission caused consternation in some countries last summer when it proposed that current rules allowing state aid to loss-making hard coal mines should only be extended until 2014.

State aid to the coal sector amounts to more than €3bn annually, and the regulation permitting this was due to expire at the end of 2010. The move had big implications for Germany’s Ruhr region – as well as parts of Spain, and some central European countries. Thousands of jobs could have been jeopardised across the EU, where about 100,000 jobs still depend, directly or indirectly, on the hard coal sector.


Germany Won't Back Sale of Euro-Region Bonds

Germany is pro euro “head to toe” and won’t relinquish sovereignty over its debt management to support the sale of euro-region bonds, Foreign Minister Guido Westerwelle said in an interview with Italy’s Corriere della Sera.

The possibility of euro-region countries pooling their national debt to collectively share risk is “unacceptable,” Westerwelle told the newspaper. Such a plan wouldn’t give more profligate countries “an incentive to maintain discipline” if they knew that others were guaranteeing their borrowing, he was cited as saying.

Germany’s policy is designed to make the euro stronger and anyone who wants to do away with the euro “cannot succeed,” said Westerwelle, who leads the Free Democratic Party, Chancellor Angela Merkel’s junior coalition partner.


Balancing the Budget with a Prostitution Tax

The city of Dortmund in Western Germany has found a rather unique way to help it battle a €100 million deficit.  They have introduced a "pleasure tax" on prostitutes; each prostitute must purchase a "day ticket" for €6 for each day that they wish to work.  The tax is expected to raise about €750,000 to the city's coffers annually.  Alternatives like charging a €1 or €2 red light district entrance fee that would be paid by clients was also considered, but it did not get much support.

Prostitution was legalized in Germany in 2002; the country has an estimated 400,000 registered sex trade workers according to Hydra, the organization that represents prostitutes in Germany.  German cities other than Dortmund have implemented similar taxes on top of the income taxes that prostitutes must pay on their incomes.  Prostitutes in the city of Cologne must pay a €150 monthly "pleasure tax". 

Those that are involved only part-time in the sex trade pay a €6 per day tax rather than the monthly fee. Cologne implemented the tax in early 2004 in an attempt to reduce a €385 million budget deficit.  The tax was expected to raise about €2.7 million annually from local brothels, massage parlours and table-dancing clubs.  There are about 3000 legally registered prostitutes in Cologne; they are required to register with local health authorities for regular checkups.  Many people involved in massage parlours in Cologne were worried that implementation of the tax would drive customers to nearby cities that had no "pleasure tax" since the cost of the tax in Cologne would have to be passed on to customers.


Double money to aging survivors

The German government has agreed to double the money it provides for the at-home care of aging victims of the Holocaust, increasing it to $146 million worldwide for 2011, the Conference on Jewish Material Claims Against Germany announced. Germany initially shared the decision privately with the organization a week after the Nov. 9 announcement of the indictment of 17 people in a massive Holocaust fraud targeting German funds. The increase is a boost for the New York–based Claims Conference, which saw some of its own employees charged in the purported $42 million scheme.

“I view this as a statement from the German government about their commitment to facing their history and providing support for survivors,” Greg Schneider, the Claims Conference’s executive vice president, said Dec. 6. Although many survivors die each year, the need for at-home care will continue to increase until 2014, when the number of deaths will overtake the number of newly frail, the Claims Conference projects.

The money for 2011 is expected to raise the number of financially needy survivors receiving subsidized care to roughly 70,000 from the current 58,000. In a scandal that was made public last month, U.S. prosecutors said more than 5,500 fraudulent claims for German Holocaust reparations — many of them containing altered birth dates and faked stories of suffering — were approved by the conference.

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