At the industry conference at the end of November, Robert Habeck dropped the announcement for the first time, shortly before Christmas he followed up in a paper with his French counterpart Bruno Le Maire: According to the Federal Minister of Economics, 2023 should be dominated by industrial policy.

After he spent the first year in office largely procuring replacements for the missing Russian gas, it should now be about what the Greens actually started for: the conversion of the economy to climate neutrality.

Whether electromobility, hydrogen or heat pumps: Germany should make faster progress in all these areas.

This should succeed above all with more subsidies – just like the American government is currently zealously distributing with its “Inflation Reduction Act”.

Julia Loehr

Business correspondent in Berlin.

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Economists see the "European green industrial policy" - the title of the position paper from Berlin and Paris - with mixed feelings.

"Basically, I'm not a friend of industrial policy," says Monika Schnitzer, chairwoman of the German Council of Economic Experts, which advises the federal government on economic policy.

But the world has changed, says the Munich economist, referring to the subsidies in China and the United States.

“Of course you can say that we benefit from their cheap products, but we also make ourselves dependent on them.

The EU must become more sovereign between these two blocs.

And that's where industrial policy can help," says Schnitzer.

One person who sees things differently is Stefan Kooths.

"The idea that certain industries should be fed with subsidies is a relapse into the thinking of the 1990s," criticizes the Vice President of the Kiel Institute for the World Economy (IfW).

Unlike then, however, there are no idle resources and mass unemployment today, but rather a shortage of workers.

Kooths argues that they are not used through subsidies where it would make the most economic sense, but rather where the companies could benefit from state support.

“It would only make sense if the state knew better than market players which products will be in demand in the future.

But that is simply presumptuous.

And it hasn't worked in the past."

Billion dollar subsidy program in the US

The fact that the communist leadership in Beijing spares no expense in order to give domestic manufacturers advantages in the global economy is not new.

The decline of the German solar industry over the past decade is largely due to the fact that China flooded the market with cheap modules.

At the same time, the country itself wants to become less economically dependent on other countries.

What is new is that the American government is now aggressively promoting this goal.

With the $430 billion Inflation Reduction Act, President Joe Biden not only wants to create new industrial jobs.

The country is also set to become less dependent on imports from China.