Berlin Economics Minister Robert Habeck (Greens) apparently longs for France. The reason: His French counterpart Bruno Le Maire is not only economics but also finance minister. France has just launched a €500 million fund to support raw materials projects. Habeck would also like to have such a fund, but so far the money has not been available.
When Le Maire spoke to Habeck at a meeting on Monday afternoon in Berlin, the German Vice Chancellor joked, according to participants, that Le Maire had it much easier. As finance minister, he could simply get the money himself.
Habeck, on the other hand, has to negotiate with Finance Minister Christian Lindner (FDP). He already has tight cuts plans for the 2024 budget. So far, an additional fund for Habeck has hardly seemed conceivable. According to the ministry, this would need around one billion euros, according to government circles.
But a reversal is apparently possible. Habeck indicated this on Monday evening after the conversation with Le Maire and the Italian Minister for Enterprise Adolfo Urso, who is also currently launching a commodity fund of one billion euros.
When asked whether the start of the German fund in 2024 was still realistic, Habeck replied: “Because of the paramount importance of seeing economic policy as economic security policy, I think it is likely that this will happen.”
Government circles said on Tuesday that a solution was getting closer that would not require additional money from the budget. Either Habeck could reallocate the billion in his budget. Alternatively, the state development bank KfW could raise the money and the federal government could secure it.
Just last week, more pessimism could be heard in circles at the Ministry of Economic Affairs. “We have to save 20 percent and can’t do things on top,” it said.
Fund against dependence on China
With the geopolitical turning point, raw material policy has become a central topic in the federal government. Germany is highly dependent on China, especially when it comes to raw materials for strategically important areas such as battery production. The People’s Republic is by far the world market leader for most industrial metals. There is great concern that China will use dependency as leverage in a conflict.
There are definitely deposits of raw materials in other regions of the world. It’s just that many of these are not developed because companies shy away from the financial risk. As long as China delivers, it’s cheaper. Habeck fears a sudden interruption in deliveries, but does not price the economy enough.
In his view, the state must therefore provide support by participating in projects via a fund. Habeck made this proposal in January. The goal: “Increase in production capacities at home and abroad”.
>> Read here: Habeck proposes new fund in commodity strategy
If the fund does not come, Habeck explained on Monday, it would weaken its own sovereignty. “It is obvious that this cannot be in the interests of our economy,” said the Vice Chancellor.
The Social Democrats support the project. SPD economic politician Sebastian Roloff says: “The aim must be to stimulate private capital for the high and risky initial investments in mining sites and thus reduce our strong dependence.”
Commodity Fund: Clarity on July 5th
Habeck now sees himself confirmed in his plan because France and Italy are putting pressure on him. Habeck, Le Maire and Urso signed an agreement on Monday to work more closely together on raw materials projects.
The Federal Minister of Economics is wrestling with the Minister of Finance for money – also in the case of the raw materials fund.
(Photo: IMAGO/Emmanuele Contini)
“There could also be a fund in Germany tomorrow, and we have to see how we can use it to jointly finance critical raw materials,” said Le Maire on Monday. Habeck warned: Without a German fund, France and Italy could open up important new suppliers even without Germany.
>> Read here: How the EU is preparing for a trade conflict with China
The FDP remains skeptical. Reinhard Houben, economic policy spokesman for the Liberals, says: “Cutting money out of this budget for a project without a finished let alone a unified concept is politically unwise.” With this statement he also makes it clear: If Habeck finds the billion within his own budget , the FDP would probably not block the fund.
The budget negotiations are still ongoing. There should be clarity on July 5th. Then the federal cabinet could adopt the budget – possibly with a billion euros for the raw materials fund.
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