Policy Article

Subsidies in Times of Tight Budgets


  • Laaser
  • C.-F.
  • Rosenschon
  • A.
  • Schrader
  • K.
Publication Date

The decision of the Federal Constitutional Court to classify the transfer of €60 billion in unused coronavirus loan authorisations to the Climate and Transformation Fund as unconstitutional has plunged fiscal policy in Germany into a crisis. A “cash audit” is therefore called for. This article draws on the findings of the Kiel Subsidy Report. According to the budget plans for 2022 and 2023, federal financial aid is set to increase sharply. In 2023, they are expected to be even higher than the federal government’s social spending. Financial aid should therefore not be left out in order to counter-finance budget gaps.


JEL Classification
H23, H50

Key Words

  • fiscal policy and budget
  • Germany
  • tax policy
  • subsidies
  • subsidy reduction
  • federal spending