The Limited Times

Now you can see non-English news...

Auto bonus, building renovation: The fatal greed of the bosses for the state dough

2022-02-16T00:18:59.631Z


Apparently, Germany's CEOs no longer believe in the market. The industry lobby unashamedly demands billions in subsidies – and they get more than ever before.


Enlarge image

VW boss Herbert Diess calls for state aid for battery vehicles (archive image)

Photo: Denis Balibouse/ REUTERS

A good lobbyist not only knows how to steer the flow of public money in his direction.

He is also always ready to take advantage of a favorable opportunity.

Or, as a high-ranking association manager puts it: "When it rains porridge from the sky, you have to keep the spoon out".

At the moment, the mush is flowing, because the leaders in Berlin and Brussels want to save either Europe's sovereignty or the climate.

And so the stakeholders are now handing whatever scoops they can find out of the windows.

Never before has so much state money flowed into the economy as it is at the moment.

And the fact that it is mainly about big goals and noble concerns is very convenient for corporate bosses and association bosses.

It is all the easier for the general public to be held accountable for their own omissions.

»Climate protection does not come for free«

Has the car industry missed the transition to electromobility?

Not that bad, thinks VW boss Herbert Diess if the government dutifully pays the purchase premiums for battery cars for the next few years.

Thyssenkrupp is lagging behind the competition after years of mismanagement?

The transition to green steel helps, says CEO Martina Merz, for which the state should firstly finance the investments and secondly the ongoing operations, i.e. almost everything.

Companies haven't ordered enough microchips during the pandemic?

The Federation of German Industries (BDI) admits that it was perhaps a mistake.

Politicians must now “make the announced ten billion euros available for the design and production of chips” all the more quickly.

In the past, lobbyists used to weave words like “market economy” or “remote from the state” into their Sunday speeches.

But now they call for public money as unashamedly as if they were negotiating wages.

"Climate change does not come for free," threatens Hildegard Müller, head of the Association of the Automotive Industry, in the tone of trade union leaders who are ready to go on strike.

And the employer-friendly Institute of German Business, which previously could not be sufficiently critical of the state, is now trying to save the honor of the financial aid instrument.

"Less subsidies," the think tank recently reported, "are not automatically better than more subsidies."

The new pro-state tone has already changed the character of the local economy, the data shows.

Last year, Germany's state financial aid reached a historic high of almost 90 billion euros, according to the Kiel Institute for the World Economy.

And nowhere in the world, according to a study by the London Center for European Policy Research, are so many new financial aids being launched as in the former model country of the social market economy.

Almost 2,000 new subsidies have been added since 2008, an international record with which the Federal Republic of Germany now leaves countries such as Italy and France far behind.

Ludwig Erhard's economic miracle country, it seems, wants to develop seamlessly from export champion to subsidy world champion.

However, it is not clear whether this will actually advance the economy and the environment.

Experience with the recent achievements of the federal grantee is not necessarily encouraging.

Since the Berlin government introduced the purchase bonus for battery cars, the state has contributed up to 20,000 euros to the construction of each electric vehicle.

But instead of producing environmentally friendly small cars, BMW, Daimler and Co. primarily bring heavy luxury vehicles onto the market, from which they earn more.

So far, the electric bonus has promoted less climate protection than the profits and share prices of the German premium manufacturers.

The bosses no longer believe in the market

With their so-called Chips Act, Berlin and Brussels want to advance semiconductor production in the EU.

The only problem is that China and the USA are baiting the industry with even higher subsidies, so that the American market leader Intel has again postponed its decision on new factories in Europe.

Who knows, that's the calculation, whether the governments will increase their funding commitments?

A few weeks ago, Economics Minister Robert Habeck stopped the multi-billion dollar building renovation subsidy program because it had turned out to be both an expensive and pointless gift to the construction industry.

It ate billions, but was hardly of any use to the environment because the supposed climate houses even allowed the installation of CO2-emitting gas heaters.

But because the outcry from home builders and housing associations was too great, the funding applications received by the end of January are now to be approved, against all reason.

The dangers of ill-considered subsidy programs have not been demonstrated more impressively for a long time.

The bosses should actually know what a functioning climate program could look like.

European emissions trading has not only been successfully limiting CO2 emissions in the energy industry for years.

It also shows how entrepreneurial competition for ecological production processes can be unleashed without state industrial planners taking over the reins.

But apparently Germany's CEOs no longer believe in the market.

"A higher CO2 price alone will not do the trick," says BDI boss Siegfried Russwurm.

And anyone who thinks they can attract enough private investment with financial incentives is "naïve at best."

His means of choice are state subsidy programs, which the association now demands almost every day.

The government should reimburse companies for a large part of the additional costs of climate-friendly technologies.

You have to subsidize the construction of new gas-fired power plants.

And it should create incentives to start importing green hydrogen from southern climes.

Of course, the taxpayer bears the costs.

You don't have to be a qualified economist to be able to appreciate that such a comprehensive support program can neither be administered nor controlled nor financed.

Especially since the industry association took a stand against nothing in the most recent election campaign as clearly as against higher taxes

And so it remains to be hoped that it is the smarter heads in the traffic light parties who oppose the functionaries' ideas of the ecological and social state economy.

Climate Minister Habeck, it seems, has learned from the fiasco of the building renovation program.

"Subsidies," he says recently, "are the ultima ratio."

Source: spiegel

All business articles on 2022-02-16

You may like

Trends 24h

Latest

© Communities 2019 - Privacy

The information on this site is from external sources that are not under our control.
The inclusion of any links does not necessarily imply a recommendation or endorse the views expressed within them.