Associations & Federations Corona

German Chemical Industry Comments German Corona Plan

With the economic stimulus program, the German Federal Government has put together a package with a broad impact to reduce the acute economic consequences of the corona crisis from the perspective of the German Chemical Industry Association (VCI). However, this does not change the structural deficits which weaken its competitiveness.

“The content and timing for the package as the second stage against the economic crisis are right. But it is too short, because it is not a growth program for the transformation in Germany that is necessary for new products and processes, ”said VCI general manager Wolfgang Große Entrup.

“The task of politics to break up crusted deficits for competitiveness is therefore not off the table. We need a program that stimulates permanent growth and strengthens the location. These include, for example, reducing corporate taxes to an internationally competitive level of 25 percent, optimizing the digital and classic infrastructure, establishing faster approval procedures and significantly reducing the bureaucracy for companies. ”

The VCI is positive about the announced entry into the budget financing of the EU surcharge from 2021.

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“This step was long overdue and now necessary to compensate a further increase in the EU surcharge. This will otherwise go through the roof in 2021 due to the corona crisis, which would hit SMEs particularly hard in the economic crisis, ”said Große Entrup.

The budget financing for the expansion of renewables must be designed in such a way that the EU does not become an aid under EU law. As a result, all regulations within the EU would be subject to state aid control by the EU.

The VCI recognizes that the package provides companies with a boost in the recession with tax liquidity aids and energy policy relief. At the same time, the reduction in VAT in the second half of the year promptly stimulates pull-forward effects on domestic demand.

In addition, the module for the promotion of research and innovation, for example for the development of vaccines or the hydrogen economy, gives companies a positive perspective, according to the VCI.

The doubling of tax research funding by 2025 also contributes to this.

Note:

The VCI represents the economic-political interests of around 1,700 German chemical companies and German subsidiaries of foreign groups vis-à-vis politics, authorities, other areas of business, science and the media. In 2019, the industry generated sales of over 198 billion euros and employed around 464,000 people.

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