The article by Thies Thormählen, published in the *Wirtschaftsdienst* in 1985, discusses the changes in Germany's subsidy policy from 1983 to 1986. The federal government's subsidies (financial aid and tax concessions) increased from 28.2 billion DM in 1983 to 31.9 billion DM in 1985, representing 1.7% of the gross social product. The increase in 1985 was partly due to the federal government assuming the housing bonus and fixed amount from the Länder ( states ), which increased the apparent subsidy volume by 8.12 billion DM. However, this was offset by corresponding reductions in subsidies to the Länder, resulting in a net increase of about 1.1 billion DM or 3.5%.
The article highlights several factors influencing the development of subsidies:
- A significant increase in subsidies for the housing sector (+1.6 billion DM) to stimulate economic activity and reduce unemployment.
- Subsidies for structural adjustment in the steel industry (about 1.8 billion DM).
- Increased social security for miners in the coal industry and higher costs for the coke industry due to international currency fluctuations.
By 1986, the total subsidy volume was expected to decrease to 30.9 billion DM, with the federal government's share of the gross social product dropping to 1.6%. The structure of subsidies has also changed, with a larger portion (53.4%) now going directly to private households, affecting the economy more indirectly.
The article also discusses the challenges in defining subsidies, noting that different forms of aid (e.g., direct financial aid, tax concessions) have varying goals and impacts. It mentions specific examples, such as the increased VAT for the agricultural sector, which is considered a special measure rather than a direct subsidy.
The federal government plans to reduce subsidies further, particularly in the steel and coal industries, and to streamline tax concessions. However, the article acknowledges the uncertainties in planning due to economic fluctuations and the complexity of subsidy calculations. The government aims to balance the reduction of subsidies with the need to maintain economic stability and support key sectors.The article by Thies Thormählen, published in the *Wirtschaftsdienst* in 1985, discusses the changes in Germany's subsidy policy from 1983 to 1986. The federal government's subsidies (financial aid and tax concessions) increased from 28.2 billion DM in 1983 to 31.9 billion DM in 1985, representing 1.7% of the gross social product. The increase in 1985 was partly due to the federal government assuming the housing bonus and fixed amount from the Länder ( states ), which increased the apparent subsidy volume by 8.12 billion DM. However, this was offset by corresponding reductions in subsidies to the Länder, resulting in a net increase of about 1.1 billion DM or 3.5%.
The article highlights several factors influencing the development of subsidies:
- A significant increase in subsidies for the housing sector (+1.6 billion DM) to stimulate economic activity and reduce unemployment.
- Subsidies for structural adjustment in the steel industry (about 1.8 billion DM).
- Increased social security for miners in the coal industry and higher costs for the coke industry due to international currency fluctuations.
By 1986, the total subsidy volume was expected to decrease to 30.9 billion DM, with the federal government's share of the gross social product dropping to 1.6%. The structure of subsidies has also changed, with a larger portion (53.4%) now going directly to private households, affecting the economy more indirectly.
The article also discusses the challenges in defining subsidies, noting that different forms of aid (e.g., direct financial aid, tax concessions) have varying goals and impacts. It mentions specific examples, such as the increased VAT for the agricultural sector, which is considered a special measure rather than a direct subsidy.
The federal government plans to reduce subsidies further, particularly in the steel and coal industries, and to streamline tax concessions. However, the article acknowledges the uncertainties in planning due to economic fluctuations and the complexity of subsidy calculations. The government aims to balance the reduction of subsidies with the need to maintain economic stability and support key sectors.