By Rhod Mackenzie
One of the main tasks of German Chancellor Scholz in the economy is to stop the flight of capital (investment) from the country, which has taken catastrophic proportions in the last two years. Last year, German companies withdrew from Germany in the form of investments in other countries, according to the German Economic Institute (GEI), more than 135 billion euros. Meanwhile, only 10.5 billion euros came into the country. Instead of working in Germany, these German billions are helping the US and Asian economies grow. In Germany, meanwhile, German economists are sounding the alarm, the actual de-industrialization of the country is in full swing.
Of course, the federal government led by Olaf Scholz is not sitting idly by. In June, the chancellor attended a ceremony to sign an agreement with Intel Corp to build a $30 billion semiconductor plant in Magdeburg. In May, he traveled to Dresden to start construction of another chip plant by Infineon Technologies AG. True, judging by the estimate - 5 billion euros, this plant will be much smaller than the Magdeburg one. In February, Scholz was at length praising the leadership of German automaker ZF Friedrichshafen and US chip maker Wolfspeed Inc., which signed a $3 billion deal to make chips for electric vehicles.
Trying to reverse the alarming trend of withdrawal of investments and the Minister of Finance Christian Lindner, the leader of the free democrats, who are considered the main supporters of business in the political landscape of Germany. Lindner is planning a whole package of measures aimed at increasing investment by small and medium-sized enterprises and companies related to the implementation of big tasks in the fight against climate change.
The federal government has developed a plan to ease the tax burden for companies and households by approximately 6 billion euros per year. It also includes subsidies to companies, with the help of which the authorities hope to accelerate the process of decarbonization of the economy and the transition from fossil fuels to renewable energy sources.
In addition, Christian Lindner is trying to consolidate the budget after the huge costs associated with the coronavirus pandemic and the energy crisis.
It is a mistake to think that the Scholz government is doing nothing to reverse the investment flow and return the money to Germany and make it work for the benefit of the German economy. However, so far the authorities cannot boast of any particular success in this very important matter.
In his defense, Olaf Scholz and the ministers can say that investments flowed from Germany not with their coming to power, but much earlier: in 2014, for example, the excess of money withdrawn from Germany over investments that came into the country amounted to almost 85 billion dollars , and in 2019 - approx. 97 billion. In general, out of the last 9 years (2014-22), 8 more money was withdrawn from Germany than it came. The opposite picture was observed only once - in 2020, and even that year the inflow of investments was very small, only a few billion dollars.
On the other hand, Olaf Scholz cannot deny that under him this phenomenon took on proportions that threatened the largest European economy.
This article originally appeared in Russian at expert.ru