Car Subsidies vs Climate Subsidies: Germany Divided Over Stimulus Plans

  • Date: 02/06/20
  • The Local

German ministers met Tuesday to thrash out an economic stimulus package to speed recovery from the coronavirus shutdown, with the vital auto industry and possible subsidies for it a key sticking point.

Luisa Neubauer of Fridays for Future takes part in a demo near Brandenburg Gate in Berlin while political leaders discuss the economic stimulus package. Photo: DPA

Much of the wrangling is along familiar lines – Chancellor Angela Merkel’s conservatives favour tax cuts and other pro-business measures, while their centre-left SPD junior coalition partners prefer one-off payouts to families and support for struggling local governments.

But calls for massive auto subsidies have cut across party lines, setting regions and other industrial sectors against one another as they all seek cash from the government.

The subsidy plans for an industry that employs around 800,000 people have also energised those who say the coronavirus crisis offers a chance to take the green option instead and really fight climate change.

A demonstration took place in front of the chancellery on Tuesday.

Protests have also been called across the country by youth environmental movement “Fridays for Future,” after thousands turned up last week in 27 cities against any  handouts to carmakers.

“A bonus for car purchases could well be the most controversial point at the coalition talks today,” news site Spiegel Online commented.

Overall, the entire government direct aid programme could total up to €80 billion ($89 billion), weekly Bild am Sonntag reported Sunday.

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