Policy Article

Kiel Subsidy Report 2020: Subsidies on the Rise

Kieler Beiträge zur Wirtschaftspolitik, 29 Download

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The new Kiel Subsidy Report analyses the financial aid provided by the federal government (including ancillary budgets) and the tax concessions granted as a whole up to the 2020 budget. For the time being, the corona aid on the basis of the supplementary budgets of the federal government is only documented for information purposes. In addition, the autonomous financial assistance of the Länder (and their municipalities) was estimated. On this basis and excluding the corona-related supplementary budgets, a total planned subsidy volume of just under EUR 207 billion was calculated for 2020. It is EUR 7.6 billion above the level of the previous year and EUR 36.8 billion above the peak value in 2010. Excluding the corona aid, the tax concessions of the local authorities in 2020 will be EUR 67.5 billion, around EUR 1 billion or 1.5 percent above the level of the previous year. The financial assistance provided by the Federal Government has risen continuously since the all-time low of EUR 44.2 billion in 2014 and has already reached the historic high of EUR 64.6 billion in the federal budget for 2020 without corona assistance. In addition, there is expenditure with subsidy character from the 170 billion euro corona packages of the Federal Government, which account for 43 percent of this corona expenditure. Of the regular tax concessions over 100 million euros, around 22 percent are classified as particularly harmful, and 12 percent of financial aid over 100 million euros. For the first time, the Subsidies Report also comprises a comparison of subsidies with the total federal expenditure on research outside of companies and on education.