Habeck warns of job losses and industrial migration
The German government may not shift 60 billion euros within special funds. For Economics Minister Habeck, this is a decision with unforeseeable consequences. Because other countries are investing massively in the restructuring of the economy. It is a global competition. And Germany now lacks a lot of money.
Economics Minister Robert Habeck is sounding the alarm following the Federal Constitutional Court's ruling on the Climate and Transformation Fund (KTF). In a video clip, he warns of the loss of jobs in industry. These are "particularly threatened by the ruling", he said. The ruling is now sometimes equated with a lack of 60 billion euros for climate protection. However, this is "at best only a small part of the truth". What was missing was "60 billion for the transformation and for supporting industry". Following the ruling, the Green politician joined forces with business associations and trade unions. Another meeting with representatives of small and medium-sized enterprises took place on Friday morning.
In the video, Habeck goes on to say that the money was lacking both in existing sectors such as the steel and chemical industries and in the development of new industries, for example in the solar sector. With "the threat to the industrial strength of this country", jobs are also at risk. However, the German government's goal is still to renew prosperity and value creation in Germany - by transforming industry, among other things. The ruling was therefore "without question a step backwards for all the plans that were made". He now wants to work "with all his might" in the coming days and weeks to find answers.
"It's a myth that the market alone will decide"
At the meetings with business and trade unions, it had become clear that there was great concern and uncertainty among companies and employees. Habeck emphasized that the financing of the KTF was not only a question of climate policy, but above all a question of location. He would continue to campaign for funding with the utmost vigor. "The ruling of the Federal Constitutional Court is fundamental and the federal government is carefully examining the implications. Of course we will respect it," said Habeck in Berlin. "As a coalition, we will tackle the problem together and work out solutions together."
Habeck warned against losing sight of the international situation in the German debate. The transformation of industry is taking place globally because many countries and companies have recognized that these are the markets of the future. "Global competition is being fought over climate technologies. So the question is not whether green steel will be produced, but whether it will also be produced in Germany," he added, referring to the USA, for example, which is supporting the domestic economy with its Inflation Reduction Act (IRA) program.
Companies had long since set out on this path. "However, just like companies in the USA and other countries, they need support and insurance during the transition so that they can invest in our country," warned the Green politician. "It's a myth that in other countries the market alone is responsible. Other countries provide massive support for their industry."
Ministry expects lower GDP after ruling
The Ministry of Economic Affairs estimates that the ruling will slow down growth in Germany. "According to initial rough estimates, the loss of investment funds could reduce growth by around half a percentage point in 2024," said an insider. "The ruling could therefore have a negative impact on economic growth." Even before the court ruling, the EU Commission had already put Germany at the bottom of the list for growth in the eurozone next year with an expected increase of 0.8 percent.
The German government's previous economic forecast for 2024 predicts a 1.3 percent increase in gross domestic product (GDP), following a 0.4 percent contraction in the current year.
The Federal Constitutional Court had declared the climate fund set up by the traffic light government to be unlawful and also declared a supplementary budget by the traffic light government to be null and void. There is now an initial shortfall of 60 billion euros to finance measures to combat climate change and promote industry, for example. The coalition government of SPD, Greens and FDP wants to clarify how this can be achieved in parallel with the ongoing 2024 budget negotiations.
The Federal Constitutional Court's ruling on the Climate and Transformation Fund (KTF) has raised concerns for Economics Minister Robert Habeck, particularly in relation to industrial jobs. Habeck argued that the funding ruling was a "step backwards" for the plans to renew prosperity in Germany, and he emphasized the need for aid to both existing sectors like steel and chemical industries and new industries, such as solar. The Federal Ministry of Economics expects that the ruling could lead to a reduction in Germany's gross domestic product (GDP) growth by around half a percentage point in 2024.
Source: www.ntv.de
