Climate targets drive growth
Federal subsidies almost doubled since 2021
08/29/2023, 7:24 p.m
The federal government’s new subsidy report contains explosives for the traffic light: According to Finance Minister Lindner, the rate of state aid has increased from 37 to 67 billion euros since 2021. Most of the perks are related to the climate and would have to be put to the test.
According to a government document, subsidies in Germany are increasing rapidly. In 2024, the FDP-led Ministry of Finance expects a subsidy volume of 67.1 billion euros. For comparison: in 2021 it was 37.9 billion euros. This emerges from the cabinet proposal by Finance Minister Christian Lindner for the government’s subsidy report, which is prepared every two years. The report is to be decided by the cabinet in Meseberg tomorrow, Wednesday.
The development is based solely on the fact that financial aid has increased by around 30 billion euros. However, most of these are only granted for a limited period of time, the document says. “Temporary corporate aid to overcome the economic consequences of the Russian war of aggression against Ukraine is not taken into account here.” In contrast, the tax concessions attributable to the federal government will fall from 19.5 billion euros in 2021 to 18.4 billion in 2024.
80 percent of grants go to green goals
The lion’s share of subsidies is now related to environmental and climate goals. In 2023, 83 of 138 grants with a planned volume of 39 billion euros will be related to the government’s sustainability strategy. Of the total volume of subsidies – direct financial aid and tax breaks together – there is a connection to green goals in a good 63 percent of the cases. Programs from the Climate and Transformation Fund are primarily responsible for this. More than 80 percent of the financial aid should come from this in 2024. In 2021, just under 51 percent came from the climate fund.
In government circles it was said that the Ministry of Finance wanted to put the subsidy practice to the test, because a lot of funds were already being used. The limit seems to have been reached. “One thing is clear: In view of the numbers, the political discussion cannot be about more. Rather, it must be examined where subsidies can be reduced.” After all, 109 of the 138 financial aids are limited, according to the template. The reduction of climate-damaging subsidies can only cover a limited volume, because most of the measures are related to the environment and climate. The Greens and environmental organizations have been calling for the reduction of climate-damaging subsidies, especially in transport, for years.