Germany wants to become less dependent on global supply chains. Important step: The planned mega-settlement of chip factories in Magdeburg.
The high billions in aid from the federal government for the Intel settlement in Magdeburg have been criticized by economic researchers and medium-sized business associations. “The astronomical sum that Intel has received as subsidies from the federal government can hardly be justified,” said Markus Jerger, chairman of the Federal Association of Small and Medium-Sized Businesses (BVMW). It is a worrying development that large investors apparently only decide in favor of Germany as a business location if there is significant public co-financing.
The settlement of the US chip manufacturer in Magdeburg was “bought at an extremely high price,” stressed Marc Tenbieg, Executive Director of the German Association of Small and Medium-Sized Enterprises (DMB). Medium-sized companies in Germany are fighting for their own survival. “Excessive subsidies for US companies do not help the German economy and snub innovative medium-sized companies.”
Criticism also from economists
Leading economic research institutes are also critical of the state aid of 9.9 billion euros. With statements about Intel, the company was invited to push up the demands, said the deputy head of the Ifo Institute Dresden, Joachim Ragnitz. “Politics got ripped off because they said we really want you.”
Basically, it is an enormous subsidy, said the President of the Leibniz Institute for Economic Research in Halle, Reint Gropp. In an international comparison, however, this is still small. Around 700 billion euros in subsidies are currently being paid in the semiconductor industry worldwide.
Saxony-Anhalt’s Prime Minister Reiner Haseloff (CDU) defended the concessions in Magdeburg. This investment is a huge economic stimulus package for the whole of Germany. It is a project of “historical dimensions” and can only be successful if it is supported by society as a whole.
More concessions to Intel
The federal government has promised Intel further concessions. Prime Minister Reiner Haseloff (CDU) mentioned, among other things, agreements on the lowest possible electricity costs for the chip factory in Magdeburg. This also includes the development of a concept for competitive industrial electricity. This had previously been discussed with companies and a working group in the Chancellery.
According to dpa information, Intel is in negotiations with a local energy supplier about an average electricity price of ten cents per kilowatt hour for 20 years. Should market prices rise excessively during this time, the federal government and Intel want to negotiate how additional burdens for Intel can be absorbed. The “Süddeutsche Zeitung” had previously reported on this.
On Monday, the federal government and the US company signed an agreement that provides for state aid from the federal government in the amount of around 9.9 billion euros. A total of around 30 billion euros are to flow into the construction of several chip factories in Magdeburg (Saxony-Anhalt).
There is a dispute in the governing coalition in Berlin about the introduction of an industrial electricity price. Economics Minister Robert Habeck (Greens) wants to enable competitive electricity prices for industry with state aid worth billions. Above all, the co-governing FDP of Finance Minister Christian Lindner is against it.
Saxony-Anhalt’s Prime Minister also announced acceleration in the planning process. Federal law must be readjusted in many places here. Acceleration is required in order to achieve the timing specified by Intel. The US company wants to start building the factories near Magdeburg in the first half of 2024.
Source: Stern
