As of: February 6, 2024, 12:24 p.m
By: Lars-Eric Nievelstein
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The German economy is almost at a standstill.
The government wants to present the new growth agenda in February.
Despite everything, Finance Minister Christian Lindner supports the debt brake.
Berlin – Germany is no longer competitive.
This is the verdict from Federal Finance Minister Christian Lindner (FDP).
As soon as growth stops, a country falls behind.
However, compared to his coalition colleague Robert Habeck (Greens), Lindner rejects any attempt to take on new debt.
In an interview with the
Handelsblatt
, Lindner reveals which measures are intended to save Germany as a business location.
GDP in 2023 (Destatis) |
Minus 0.3 percent |
|---|---|
Tax relief under the Growth Opportunities Act (duration) |
Until 2028 |
Start of the French Tibi initiative |
2020 (result: 6 billion euros investments) |
Lindner proposes a dynamization package – new debts would “strangle the budget”
He declared from the outset that further national debt was out of the question.
Because of the high interest rates that the Federal Republic is paying on new debts, we would “quickly strangle our budget.”
Furthermore, it does not make sense for politicians to decide which industries, technologies or companies should have an economic future.
The German economy is almost at a standstill.
The government wants to present the new growth agenda in February.
Despite everything, Finance Minister Christian Lindner supports the debt brake.
© Ann-Marie Utz/dpa
Instead, the location conditions must become better “for everyone”.
Lindner suggested a dynamization package: On the one hand, the government would have to do everything to promote growth and competitiveness, but on the other hand, it would have to eliminate all factors that cost dynamism.
A competitive tax system
For example, measures are necessary to make the tax system “competitive”.
Lindner has already brought up an expiry of the solidarity surcharge.
In his opinion, tax relief will pay off in the medium term;
This is exactly where the Growth Opportunities Act, which is currently being negotiated, is intended to provide impetus for private investment and research.
Among other things, it contains tax relief for companies until 2028 and an acceleration of approval processes.
Companies are expected to receive relief of seven billion euros per year.
There is a special bonus for investments in climate protection: companies should receive 15 percent of all expenditure on energy efficiency measures as special support.
Other tax incentives in the package are intended to boost housing construction and research.
Lindner calls for a reduction in bureaucracy
“We can risk reducing bureaucracy, which starts with not also adopting this EU supply chain directive,” Lindner continued.
This directive is intended, among other things, to prevent products made from child labor from being sold in Europe.
German companies would be liable if, for example, suppliers from abroad had components manufactured using child labor.
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“I have 450 suppliers from 17 countries.
How am I supposed to check this?” Bertram Kawlath, who runs the valve manufacturer Schubert & Salzer, asked himself.
With a T-shirt he could perhaps prove whether child labor was involved or whether a company was concerned with environmental protection.
“With machines and systems that contain hundreds of parts and preliminary products, this becomes almost impossible.” If he were to order printed circuit boards in Asia and insist on proof of which metals came from which mines, “they would just give me a bird.”
The German Tibi initiative and a new corporate tax
Lindner also specifically named two projects that should take shape over the course of 2024.
Firstly, the Federal Ministry of Finance is working on a German “counterpart to the French Tibi initiative”.
This should help mobilize private capital.
To explain: At the beginning of 2020, institutional investors in France committed to investing a total of six billion euros in technology companies over a three-year period.
The French
Direction générale du Trésor
(the equivalent of the Ministry of Finance) was responsible for supervision and decided on the implementation of the initiative.
“France is now the leading ecosystem for financing new technologies in the European Union,” the government announced after completing phase 1 of the initiative.
“The remarkable success of the French Tibi initiative, which channeled funds from institutional investors into French tech growth companies, is an impressive example of how to mobilize private capital on a larger scale,” said Christian Lindner.
“It would be great if we could implement this as extensively as possible in Germany.” In the middle of the year, a group of experts is also expected to present a proposal for corporate tax reform.
Ditch the water for the AfD
Since a much-discussed
Correctiv
article from a few weeks ago, the AfD has been discussed again and again as a risk factor for the economy.
According to Lindner, this largely stems from concerns among companies that do not want to recruit where the AfD is strong.
“We have to make small the problems that made the AfD big,” said the finance minister.
“We have to send a signal to demand something in return for solidarity.” He doesn’t want to continue to stand idly by while immigration into the welfare state takes place without “the idea of gainful employment” being associated with it.
The “new realpolitik” on migration should also reduce the costs of irregular immigration.
“We have to work hard for a new growth agenda,” warns Lindner.
You shouldn't overwhelm people, but you shouldn't underestimate them either.
German economy
The overall economic development in Germany is currently stalling.
“The prices that remain high at all levels of the economy despite the recent declines have dampened the economy.
In addition, there were unfavorable financing conditions due to rising interest rates and lower demand from home and abroad,” explained Ruth Brand, President of the Federal Statistical Office, in a report from the authority.
The price-adjusted gross domestic product was minus 0.3 percent in 2023 compared to 2022. After the coronavirus pandemic, a recovery took place in 2021 and 2022, which has now not continued.
Politicians are currently looking for answers to stimulate the economy again.