Rules for investment guarantees create uncertainty

Bundestag

Robert Habeck: The Federal Minister of Economics wants to revise the rules for investment guarantees.

(Photo: dpa)

Berlin There is still uncertainty in the German economy as to what effect the federal government’s new rules for investment guarantees will have in the end. As it was said on Thursday from circles of the Federal Ministry of Economics, the government has apparently agreed to limit the billions in state investment guarantees for the German economy. The measure aims to motivate German companies to invest more in other regions of the world, so that they can put their sometimes strong focus on the Chinese market into perspective.

It is not yet possible to make an assessment of possible effects, the Federation of German Industries (BDI) said when asked. The head of foreign trade at the Association of German Chambers of Industry and Commerce (DIHK), Volker Treier, expressed understanding for “understandable political measures aimed at Germany’s economic security interests”.

However, he emphasized that the internationally active German companies are urgently waiting for measures “that will give them more legal security and support for their foreign business”. This is of great importance, especially in the currently very gloomy environment, also in terms of foreign trade.

Only three billion euros per country

In the future, companies should only be insured for three billion euros per country in which they are active. The total is reviewed every three years and adjusted if necessary.

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In addition, the premium for companies that have to pay this annually to the state insurer for the guarantee is to be increased. Normally, it is 0.5 percent of the insured amount. In countries where more than 20 percent of the total of 29 billion guaranteed by the federal government is insured, the premium is to rise to 0.55 percent.

>> Read here: The federal government wants to significantly limit investments by German companies in China

In general, it is primarily large companies that benefit from investment guarantees. The total guarantee volume assumed in 2021 was around 2.6 billion euros. Only 13 percent of the applications approved in 2021 were made by small and medium-sized businesses.

In addition to more extensive investment guarantees and export credit insurance, it is important “that the federal government and the EU are committed to concluding ambitious trade agreements – also with countries with which, among other things, value standards have to be discussed,” said DIHK foreign trade chief Treier.

A special evaluation of the AHK World Business Outlook among more than 500 companies surveyed in the Asia-Pacific region showed that 17 percent expect worse business for the next twelve months. On the other hand, 44 percent believe in a positive development. In comparison, 28 percent of companies in China are optimistic about the coming year, while 23 percent expect worse business.

More: Federal government stops further Chinese takeover of German semiconductor company

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