That Will Be Another Sad Awakening

2023 Author: Eric Donovan | [email protected]. Last modified: 2023-11-27 05:39

After the agreement within the coalition, the formal decision of the federal government followed a few hours later. The scrapping premium will be increased. But not everyone is happy about that.

With the scrapping bonus of 2500 euros, the federal government wants to make it easier for two million old car owners to decide to buy a new car. The cabinet decided on Wednesday to expand premium spending from 1.5 billion euros to a maximum of five billion. This means that the funds are no longer sufficient, as initially intended, for 600,000 applications, but for two million. The premium to boost car sales should expire by the end of the year at the latest. The evening before, a ministerial round headed by Chancellor Angela Merkel (CDU) agreed on the expansion. The group leaders were included in the decision.

1.2 million applications received

So far, the Federal Office for Economics and Export Control (Bafa) has received 1.2 million applications, which corresponds to a total volume of 3 billion euros. The increase in the budget enables a further 800,000 applications. The federal government made it clear that five billion would be the “final upper limit”. The premium is the most successful instrument of the economic stimulus package II. This premium can be enjoyed by drivers who own a vehicle that is at least nine years old for at least one year, have it scrapped and buy a new or annual vehicle instead.

The chairman of the Green parliamentary group, Renate Künast, criticized the planned increase in premium expenditure. This regulation was "botch" from the start, she told the "Neue Osnabrücker Zeitung" (Wednesday). "It will be a very sad awakening." The bonus only triggers deadweight effects. "Anyone who buys a new car now will not buy one next year and the year after - when new, more environmentally friendly models come on the market," said Künast. Therefore there will be a "rapid slump in sales".

The Green politician also criticized that the premium had no positive effects on the environment. "They didn't even manage to just encourage the purchase of particularly low-emission vehicles." Environmental groups argued similarly. They are demanding that the premium be stopped immediately. The birth defect of not linking the premium to environmental criteria is irreparable, said BUND chairman Hubert Weiger. The advantage for imported cars shows that German manufacturers can no longer ignore customer requests for economical and inexpensive cars.

However, the scrapping premium also slowed the free fall of German premium manufacturers in March. Daimler, BMW, Audi and Porsche, which recently had to struggle with a drastic drop in sales, reported at least an improvement in the situation. These manufacturers continue to complain that the premium mainly benefits mass manufacturers, but that it has a positive effect on the mood.

Union parliamentary group leader Volker Kauder (CDU) signaled support for the increase. «I really wanted a limit so that there would be no permanent subsidy. That has been achieved, for which I carry the five billion,”he told the“Süddeutsche Zeitung”(Wednesday). With a view to the high costs, Kauder emphasized: "The scrapping bonus shows that you cannot be too careful with consumer incentive programs." (dpa)