Exclusive-German 2024 fiscal cushion jumps to 67 billion euros on green transition

By Christian Kraemer and Maria Martinez

BERLIN (Reuters) -Germany’s fiscal support is expected to rise to a total of 67.1 billion euros ($72.36 billion) in 2024 to drive the transition towards a greener economy, up from 37.9 billion euros in 2021, according to a government document seen by Reuters on Tuesday.

The total figure of 67.1 billion includes 48.7 billion euros in subsidies and 18.4 billion euros in tax relief.

In the period from 2021 to 2024, subsidies increased by 30 billion, while tax concessions fell one billion in the same period.

Most of the subsides aim to boost the energy transition. The government paper shows that in 2023, 83 of the 138 financial grants budgeted with a volume of 39 billion euros were related to the government’s sustainability strategy.

As Europe’s largest economy boosts such spending, some critics fear that without a new European Union green fund, only bigger countries with more fiscal power will be able to push ahead with national subsidies, leaving smaller countries behind.

State support can help drive innovative transformations and sustainable growth but it cannot replace private capital, according to government sources. Of the 138 subsidies, 109 are temporary.

The political discussion cannot be about more subsidies, the sources said, adding that it was much more important to examine where subsidies can be reduced.

($1 = 0.9273 euros)

(Reporting by Christian Kraemer and Maria Martinez, Editing by Rachel More and Josie Kao)