Robert Habeck’s problem with high earners

Berlin A strict interpretation of remuneration regulations by Federal Minister of Economics Robert Habeck (Greens) causes difficulties for funding projects for the vehicle and supplier industry. It is about so-called transformation networks.

These networks are intended to help promote structural change in regions that are heavily dependent on the vehicle industry and are facing major upheavals due to the move away from the combustion engine. The grand coalition had made up to 200 million euros available for this as part of its one billion euro future fund for the automotive industry.

For example, companies, universities, trade unions, business development agencies and local authorities can join forces in the networks in order to develop new business areas and employment prospects for the affected regions. According to the Ministry of Economic Affairs, 26 funding projects have been approved so far.

The fact that the Ministry of Economic Affairs is interpreting the so-called ban on better opportunities from the Budget Act more strictly than before is causing trouble. According to the ban on better opportunities, institutions that cover more than half of their expenses from public project funding may not pay their employees better than comparable federal employees. The requirement is intended to prevent abuse.

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Applicants from the regional transformation networks in Bavaria, the capital region, Leipzig, East Württemberg, Heilbronn and Stuttgart have therefore received mail from the Federal Ministry of Economics. They should prove that the ban on better opportunities is being observed or guarantee that it will be observed by the end of the year at the latest.

>> Read here: Networks, political will and a lot of money: This is how German companies should create change

The spicy thing about it is the new interpretation: The officials from Habeck’s department insist that the partners involved in a network do not pay their employees any better than comparable federal employees – even if they have nothing to do with the transformation network itself, for example managing directors of consulting companies.

This gets large business development agencies into trouble, which, for example, appear in Heilbronn, Stuttgart, Hanover or Bavaria as applicants or coordinators of the regional transformation networks.

Finance Minister Christian Lindner (left), Economics Minister Robert Habeck

Exceptions to the ban on preferential treatment are only possible with the approval of the finance minister.

(Photo: IMAGO/Future Image)

For example, the Bayern Innovativ company, which has been in existence for more than 25 years, provides advice and funding in the areas of digitization, health, energy, mobility and cultural industries. It organizes trade fairs and workshops and employs more than 200 people. The coordination role in the transformation network is therefore only a small part of their range of tasks.

Nevertheless, Bayern Innovativ and other business and innovation promotion companies should now confirm that they pay all their employees – including the management – no better than provided for in the collective agreement for the public sector.

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Because the consortium partners concerned cannot or do not want to sign the required declaration, numerous projects – including those that have already been approved – are threatened with a delay or even the end. The Federal Ministry of Economics states that the ban on better opportunities under the Budget Act must be observed for all federal project funding.

Higher salaries than according to the collective agreement for the public service are only possible with an exceptional permit from the Federal Ministry of Finance. However, the ministry cannot provide any information on financing issues for individual projects or case-specific interpretations of the ban on better employment, said a spokeswoman.

IG Metall, which is involved in numerous transformation networks, does not want to be satisfied with that. This central design element of structural change must not fail because of bureaucratic hurdles, says Wolfgang Lemb, the board member responsible for industrial and structural policy.

“The Federal Minister of Economics is called upon, in coordination with the Federal Ministry of Finance, to quickly find a pragmatic solution so that activities in the affected regions are not further postponed.”

The economics ministers of the affected federal states are also alarmed: The previous practice has sufficiently guaranteed that no person will be better off who worked directly on the project or whose work was attributed proportionately to the project, says Bavaria’s department head Hubert Aiwanger (free voters).

“I don’t understand why Berlin is surprisingly changing a functioning practice.” Why should an institution be excluded from federal programs just because the managing director is paid above the tariff due to its size, but is paid from other means.

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