Federal support for specific industries and businesses is projected to rise significantly, reaching approximately €77.8 billion by 2026, a substantial increase from €45 billion in 2023. This projection, outlined in the 30th Subsidy Report, indicates a steady climb, with support levels reaching €77.6 billion in 2025. The Federal Cabinet is expected to formally approve the report, published by the Federal Ministry of Finance, this Wednesday.
The substantial increase is primarily attributed to the federal government’s assumption of costs associated with the renewable energy surcharge (EEG levy) from 2024 onward. This change reportedly relieved electricity consumers by €18.5 billion in 2024 alone.
Direct financial aid provided by the federal government to businesses and sectors is anticipated to remain relatively stable at around €59 billion for 2024, 2025 and 2026. Tax breaks, however, are projected to increase by approximately €1 billion in 2025 to €19.4 billion, before decreasing slightly to €18.4 billion in 2026.
The ministry emphasizes that the report compares actual figures for 2023 and 2024 with planned target figures for 2025 and 2026. Experience from previous reports suggests that actual expenditure typically falls considerably below the budgeted amounts. This trend is expected to continue for 2025 and 2026.
Key areas receiving support include initiatives promoting ecological and digital transformation, as well as social considerations. Specific measures focus on decarbonizing the transportation and building sectors, advancing hydrogen technologies, bolstering microelectronics and supporting social housing construction. Approximately 90% of the financial support volume is directed towards environmental and climate protection goals.
The report acknowledges that the German economy faced recessionary conditions in recent years due to various shocks and structural challenges, creating a significant need for investment in maintaining and modernizing public infrastructure, alongside decarbonization and economic and supply security.
However, the report highlights the need for budgetary consolidation, placing subsidy policy in a tension between investment requirements and the imperative for cost savings. The Ministry of Finance indicates that all ministries have been asked to contribute to necessary reductions, with a focus on reviewing existing subsidies.