Policy Article

Subsidy boost from Corona?

Wirtschaftsdienst, 8/2020

Digital traffic sign announcing contact restrictions within Berlin

On 3 June 2020, the grand coalition put together a "stimulus package" and a "package for the future" worth 170 billion euros to combat the consequences of corona, secure prosperity and strengthen sustainability. This paper examines the share of subsidies in the two packages and how these subsidies should be assessed. The authors base their analysis on the Kiel Subsidy Reports of the Kiel Institute for the World Economy and the Kiel subsidy traffic light scheme contained therein. The analysis reveals that the temporary subsidy increasing content of the Corona packages is significant due to a share of 43 percent of the total package.