German business is frustrated with a government in chaos
Since November 15th, German business circles have been preoccupied with “Förderbescheid,” or formal funding notices. This follows a ruling by the federal constitutional court that declared the government’s plan to redirect €60bn ($66bn) in “emergency” covid-19 credit lines towards infrastructure and the energy transition as unconstitutional. This decision has disrupted the coalition government’s spending plans and raised concerns among companies reliant on public support for their investments. Although not numerous, these companies are crucial to the government’s economic vision, which is significant for German enterprise as a whole.
In early December, Northvolt, an innovative Swedish battery-maker, received a €564m subsidy, or “Förderbescheid,” to build a €4.5bn factory in the northern German state of Schleswig-Holstein. Other companies, including those involved in 11 of Germany’s 27 “important projects of common European interest” that are still awaiting formal funding offers, anxiously await their economic incentives.
Instead, they were met with austerity measures. On December 13th, Social Democrat Chancellor Olaf Scholz announced that they would have to make do with significantly less money. After tense discussions with his Green and Free Democrat partners, Scholz revealed €29bn in savings, including €12bn less for an off-budget climate and transition fund. The details are yet to be finalized, but some of the savings will come from ending subsidies for electric vehicles and solar power earlier than expected, implementing a higher carbon tax increase, and introducing a new fee for companies using plastics. No more “Förderbescheid” in sight.
2023-12-14 09:06:18
Source from www.economist.com
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