BFederal finance minister Christian Lindner wants to abolish purchase premiums for electric cars. “We simply can no longer afford misguided subsidies,” said the FDP boss of the “Welt am Sonntag”: “If it’s up to me, the purchase premiums for electric vehicles and plug-in hybrids, for example, will be removed. So far, the cars have been subsidized with up to 20,000 euros over their lifetime, even for top earners. This is too much. We can save billions that we can use more sensibly.”
He also cites the sharp rise in interest costs as one reason for his insistence on complying with the debt brake in the coming year. “Last year we paid a good four billion euros in interest,” said the minister. “It cannot be ruled out that it will be up to 30 billion euros next year.” The rising interest rates are “a signal for reversal. We are not only at a turning point in security policy, but also in economic terms.”
The finance minister is insisting that the federal government once again comply with the debt brake suspended in the corona pandemic. The debt brake enshrined in the Basic Law only allows for minimal borrowing. In recent years, it had been suspended because of the high loads caused by the corona pandemic and then by the war in Ukraine. The recently approved federal budget for 2022 provides for new borrowing of almost 139 billion euros. Lindner intends to present the draft budget for 2023 shortly.
Habeck revised the funding for electric cars
So far, the traffic light is planning a reform of government premiums for the purchase of electric cars and plug-in hybrids. According to plans by Economics Minister Robert Habeck (Greens), the subsidy for plug-in hybrid cars is to be canceled at the end of 2022, earlier than previously planned. Plug-in hybrids combine an electric motor and a combustion engine. According to Habeck’s plans, there should also be less money from the state for pure electric cars in the future.
Lindner had spoken out in favor of reducing state subsidies. At the end of May he said at the “Business Day” of the CDU Economic Council in Berlin that the state not only had to get used to the “addiction to new debts”. “We also have to get used to the addiction to new subsidies,” said Lindner. Car manufacturers make billions in profits, electric cars are not available. “Nevertheless, there are still purchase premiums on top of that.” Lindner also mentioned state subsidies for the construction of new buildings. The state will not be able to subsidize everything in the long run.
“In 2023, I want to end the three years of financial policy emergency by returning to the debt brake,” said Lindner. The coalition agreement contains many projects that have not yet been specified. “Therefore, a priority must now be set,” emphasized the finance minister.
“In order to combat inflation, the state must end politics on credit,” warned Lindner. “From now on, generating wealth must be more important than distributing it,” he added. Solid finances are the basis for everything else: “We simply can no longer afford misguided subsidies.”
Headwind to Lindner’s course came from the Greens. The budget spokesman for the parliamentary group, Sven-Christian Kindler, said on Saturday that austerity policies are the wrong instrument in times of crisis. “Unfortunately, in 2023 we will very likely still have to contend with the massive consequences of the Ukraine war, fossil fuel inflation and the corona pandemic. In times of need, one does not cut corners and suggest normalcy, but tackles the crises with determination. Fiscal policy in these times of crisis does not mean constantly saying no, but rather shaping it and solving the problems.” The social consequences of the price increases must be cushioned. Poor people and families in particular needed additional support.