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Plan to End E-Vehicle Subsidies Sparks Anger in Germany

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Re: Plan to End E-Vehicle Subsidies Sparks Anger in Germany

#11

Post by hnbad »

V__ wrote: post #2

It's less a plan and more the result of a court case, which forced the government to reduce their budget for the next year.

That's not the entire truth. The government could abolish (or pause) the "debt brake" or raise taxes, however neither option is acceptable to the so-called liberal party that is effectively acting as the king maker in this coalition (being the smallest partner but also ideologically distant enough to be the most at risk of breaking rank, which they threaten constantly). They also resist any cuts to subsidies for sectors their donors care about (which is why 1/3 the cuts to "climate damaging subsidies" affect agriculture despite only like 10% of those subsidies in total being for agriculture). They would however be perfectly fine cutting social welfare programs, of course, and were happy depleting the budget used to subsidize the "49€ ticket" for public transit (which was based on a test run of a "9€ ticket" and has already been announced to go up in price in the near future).

So with the "liberals" preventing tax increases (or resuming the existing wealth tax that was put on hold decades ago), preventing cuts to subsidies to fossils and also preventing any action agains the "debt brake", there's not much the government can do.

It's important to note that the "debt brake" is entirely self-imposed and the government can legally suspend it as would be warranted in an economic downturn (which requires investment as austerity is widely known to be ineffective to the point of being self-destructive unless your goal is to just privatize everything and tank the economy further) or during a major crisis (which I believe was the justification for the "special military budget" conjured out of thin air after the invasion of Ukraine or for the temporary suspension during the pandemic). Arguably even the climate catastrophe would qualify if we were taking it more seriously. The entire justification for the "debt brake" was to pay off debt during an economic boom to have more wiggle room during an economic downturn - except that justification completely went out of the window once inflation started going up and now it's just treated as self-justified and not to be questioned.

Re: Plan to End E-Vehicle Subsidies Sparks Anger in Germany

#12

Post by mike_hock »

grecy wrote: post #9
physicsguy wrote: post #5

Earlier quoted context omitted.

> Reducing the number of cars burning fossil fuels is. Only if it's matched by a sufficient switch to renewables instead of fossil fuel generation.

That is not correct. EVs are so much more efficient than ICE vehicles they are still a net win even when powered with "dirty" electricity. https://www.forbes.com/sites/mikescott/2020/03/30/yes-electr...

Equivalent to a net win that could easily be gotten by replacing SUVs by other petroleum-powered vehicles with a more reasonable carbon footprint, without the need to build completely new infrastructure.

Re: Plan to End E-Vehicle Subsidies Sparks Anger in Germany

#13

Post by adamsb6 »

bradley13 wrote: post #3

The auto industry has a huge amount of influence in Germany. Consumers are probably less bothered - all subsidy programs have an end, and people know this. However, the auto industry claiming "woe is us, the economy will crash, because we are so important"? That's the backlash. Germany has a deficit problem. They are expecting to run a deficit of 4.25% this year, when 3% is the upper limit if there is no emergency. T…

One perspective I found illuminating recently:

US debt in practical terms is financed by creditors showing up for treasury auctions. The biggest two holders of our treasury bills, Japan and China, are scaling down how much they’re willing to purchase.

If the world appetite for these instruments dries up we’re in serious trouble, either we default or we print money and inflation takes off again.

At the same time there are Thucydides trap advocates in DC that are bent on ensuring we remain the greatest great power, and are antagonizing China in an effort to keep America as the hegemon. China could just decide not to buy any more debt, or even worse, sell the debt it has and make the market for US debt even more unfavorable for the US.

Economic forces are incentivizing cooperation but political forces are rejecting it.

Re: Plan to End E-Vehicle Subsidies Sparks Anger in Germany

#14

Post by ricw »

the-dude wrote: post #8
bradley13 wrote: post #3

The auto industry has a huge amount of influence in Germany. Consumers are probably less bothered - all subsidy programs have an end, and people know this. However, the auto industry claiming "woe is us, the economy will crash, because we are so important"? That's the backlash. Germany has a deficit problem. They are expecting to run a deficit of 4.25% this year, when 3% is the upper limit if there is no emergency. T…

Just to add : the 3% limit comes from the Euro ( the currency ) agreement.

That rule isn’t being enforced. The rule in question is a domestic German deficit limit that requires governments to only spend more during emergencies or recessions, which ironically Germany has just officially entered.

Re: Plan to End E-Vehicle Subsidies Sparks Anger in Germany

#15

Post by darklycan51 »

Germany is legit the one country in the western hemisphere doing the most damage to the future, and I am surprised how nobody calls them out on it.

1)Turning off nuclear and cancelling plans for new plants because literally their party, the "green party" originated as an anti nuclear party, so of course they don't care and just do it for political reasons.

2)E-Vehicles from US and China threatening Germany's old guard that refuses to adapt? who cares about the environment then.

Remember them falsifying reports and getting away with a slap in the wrist?

Re: Plan to End E-Vehicle Subsidies Sparks Anger in Germany

#16

Post by elzbardico »

adamsb6 wrote: post #13
bradley13 wrote: post #3

The auto industry has a huge amount of influence in Germany. Consumers are probably less bothered - all subsidy programs have an end, and people know this. However, the auto industry claiming "woe is us, the economy will crash, because we are so important"? That's the backlash. Germany has a deficit problem. They are expecting to run a deficit of 4.25% this year, when 3% is the upper limit if there is no emergency. T…

One perspective I found illuminating recently: US debt in practical terms is financed by creditors showing up for treasury auctions. The biggest two holders of our treasury bills, Japan and China, are scaling down how much they’re willing to purchase. If the world appetite for these instruments dries up we’re in serious trouble, either we default or we print money and inflation takes off again. At the same time there…

Political Forces: a.k.a., The Neocon Cabal and the revolving door of the Military Industrial Complex.

Re: Plan to End E-Vehicle Subsidies Sparks Anger in Germany

#17

Post by hnbad »

hiq wrote: post #4

> Germany's plans to get 15 million electric cars on the road by 2030. That's such a bad metric. Increasing the number of cars on the road is not good from an environmental perspective. Reducing the number of cars burning fossil fuels is.

But you don't make money by reducing the number of cars. You make money by increasing the number of cars. The car lobby would never approve a plan that resulted in fewer cars overall unless it can be done in a way to still increase profits (e.g. by reimbursing manufacturers for lost sales).

When the German government wanted to reduce the number of fuel inefficient old cars on the road it didn't just pass a bill permitting cities to create "clean air zones" placing limits on particles in car exhausts, they also created a subsidy "scrap bonus" for trading in older vehicles when buying new ones (instead of resale those cars would then be scrapped for which the salesperson would be reimbursed).

In a way the "e-vehicle" subsidies are even worse because they don't even require a trade-in, they just subsidize putting more cars on the road and especially buying smaller electric cars for short distance commutes that are more likely to move people off public transit or bikes than existing ICE cars.

Re: Plan to End E-Vehicle Subsidies Sparks Anger in Germany

#18

Post by hnbad »

ricw wrote: post #14
the-dude wrote: post #8

Earlier quoted context omitted.

Just to add : the 3% limit comes from the Euro ( the currency ) agreement.

That rule isn’t being enforced. The rule in question is a domestic German deficit limit that requires governments to only spend more during emergencies or recessions, which ironically Germany has just officially entered.

The requirement also says nothing about not being allowed to raise taxes or reactivate the wealth tax so the problem isn't really that they need to "reduce the budget" just that they're not allowed to add debt and the tiniest coalition partner is threatening to jump ship if they raise taxes or cut subsidies to that party's donors (especially fossil, car manufacturers and air travel).

Re: Plan to End E-Vehicle Subsidies Sparks Anger in Germany

#19

Post by dangus »

generic92034 wrote: post #7
bradley13 wrote: post #3

The auto industry has a huge amount of influence in Germany. Consumers are probably less bothered - all subsidy programs have an end, and people know this. However, the auto industry claiming "woe is us, the economy will crash, because we are so important"? That's the backlash. Germany has a deficit problem. They are expecting to run a deficit of 4.25% this year, when 3% is the upper limit if there is no emergency. T…

> Since there are lots of USAians here: The USA is running the highest deficits of any developed country (including infamous Japan). See the latest IMF Fiscal Monitor, page 50 ( https://www.imf.org/-/media/Files/Publications/fiscal-monito ...). Y'all might want to plug that leak... And while the USA is attracting a huge amount of investment with their IRA, Germany is losing parts of their industry (chemical industry…

Two countries on the top of the geopolitical power rankings have the most debt, and that seems expected and normal to me.

Your ability to take on debt reflects other people’s willingness to lend to you, as well as your ability to turn today’s money into a larger amount of tomorrow’s money.

Which governments are more reliable borrowers than the US or Japan? Is there a safer currency than US Dollars more likely to maintain its value that you’d rather be paid back in?

Re: Plan to End E-Vehicle Subsidies Sparks Anger in Germany

#20

Post by borissk »

adamsb6 wrote: post #13
bradley13 wrote: post #3

The auto industry has a huge amount of influence in Germany. Consumers are probably less bothered - all subsidy programs have an end, and people know this. However, the auto industry claiming "woe is us, the economy will crash, because we are so important"? That's the backlash. Germany has a deficit problem. They are expecting to run a deficit of 4.25% this year, when 3% is the upper limit if there is no emergency. T…

One perspective I found illuminating recently: US debt in practical terms is financed by creditors showing up for treasury auctions. The biggest two holders of our treasury bills, Japan and China, are scaling down how much they’re willing to purchase. If the world appetite for these instruments dries up we’re in serious trouble, either we default or we print money and inflation takes off again. At the same time there…

The situation with the US debt is serious, but the way you present it - as just a matter of China decision to collapse US is not correct.

There are very good reasons the vast majority of the world countries, companies and rich people invests in US government debt. China, Japan and the other investors will be hard pressed to find an alternative.

Cooperation with a country like China is very hard and often impossible. The second they smell weakness in the West they'll start pushing smaller countries around, building military bases across the world, potentially invade Taiwan, etc.

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