One-sided preferential treatment: Economists are calling for car assistance to be canceled

The federal government is helping the economy in the corona crisis with funding worth billions. However, experts from the Kiel Institute for the World Economy are of the opinion that part should be deleted without replacement. You criticize a one-sided promotion of electric mobility.

The federal government's economic stimulus package in the fight against the corona crisis is partially damaging the economy. Experts from the Kiel Institute for the World Economy (IfW) write in a new study that over 40 billion euros of the planned subsidies should be viewed critically. Around 4.4 billion euros or 2.6 percent of the total package can even be classified as harmful to the economy as a whole and should be deleted without replacement.

This includes, for example, the promotion of electric mobility by increasing the purchase premium from 4,000 to 6,000 euros for a total of 2.2 billion euros. According to the IfW experts, the fleet exchange programs for 200 million euros and the bonus program for future investments by vehicle manufacturers and suppliers for 2 billion euros should also be canceled.

"With the one-sided and massive funding of electromobility, the state disadvantages alternative drive concepts that may later prove to be more advantageous," says IfW expert Claus-Friedrich Laaser. "The bonus program only subsidizes the auto industry and its suppliers, other important economic sectors do not benefit."

"Promotion of individual technologies not efficient"

As contradicting and therefore inefficient, 14.7 billion euros of the subsidies and thus around 8.8 percent of the total package are quantified. This includes the IfW lowering the EEG surcharge to promote green electricity, financial aid for the preservation of the forests and for the conversion of the aircraft fleets to the latest machines as well as the CO2 building renovation program.

"The problem is not the goal of the climate protection measures, but their design," says Laaser. "The promotion of individual technologies or behaviors is not efficient. A uniform CO2 price across all sectors would be much more effective and cost-effective."

The authors of the study consider subsidies of 21.3 billion euros (12.7 percent) to be controversial, as arguments for and against the measures could be found or they could be made more cost-effective. This concerns about the national hydrogen strategy of seven billion euros.

"The critical thing is that the subsidies are only tailored to a specific technology, but this weakens the previously one-sided support for electromobility," says Laaser. "From a macroeconomic point of view, however, funding that is completely open to technology would be preferable."