After budget verdict: Chancellor “confident” about chip factory subsidy

2023-11-21 18:19:41

After budget verdict, Chancellor “confident” about chip factory subsidy

“You don’t see me here as a person without confidence”: Chancellor Olaf Scholz at the digital summit in Jena. photo

© Martin Schutt/dpa

Promoting digital sovereignty in Germany requires billions in investments. However, following the Constitutional Court’s ruling on the government’s budget policy, a number of projects are in jeopardy.

After the far-reaching budget judgment of the Federal Constitutional Court, Chancellor Olaf Scholz (SPD) is confident that the planned ten billion euros in subsidies for the construction of a chip factory in Magdeburg can continue to flow. “We want to continue to advance the modernization of our economy and this includes semiconductors and the semiconductor industry,” said Scholz at the federal government’s digital summit in Jena. “You don’t see me here now as a person without confidence.”

However, the Chancellor did not use his appearance at the panel discussion to firmly guarantee the subsidies. “We can’t shake the answer out of our hands now, we have to work hard to find it.”

The Federal Constitutional Court had declared a reallocation of 60 billion euros in the 2021 budget to be unconstitutional. The federal government is not allowed to use funds intended to combat the Corona crisis for climate protection. This could have a major impact on the so-called climate and transformation fund, from which the federal government wanted to pay for numerous funding programs.

The US chip manufacturer Intel is planning to build a new chip factory in Magdeburg. The investments are around 30 billion euros, and the state wants to contribute around 10 billion euros. The first chips will be produced in Saxony-Anhalt’s state capital from 2027.

Habeck also wants to continue with the chip plans

Before Scholz’s appearance, Economics Minister Robert Habeck had already spoken out in favor of continuing the billion-dollar chip plans. The Green politician said that after the ruling from Karlsruhe, one could not only implement projects for which there was already a formal funding decision. After the budget freeze, the financing of all projects that have already received a formal funding decision is secure, said the Vice Chancellor in Jena. “The reverse conclusion, however, would be inadmissible in my view.”

The chip project in Magdeburg is seen by representatives of the digital industry as a significant milestone on the path to digital sovereignty because it reduces dependence on Asian chip manufacturers. The President of the Ifo Institute, Clemens Fuest, is critical of the project: “Politicians are currently handling the money quite loosely and are distributing subsidies with dubious justifications, such as the 10 billion for Intel in Magdeburg. The verdict is now forcing a lot to put it to the test,” said the economist after the decision from Karlsruhe.

dpa