Overview

• The Scientific Advisory Board delivered a new assessment to Economy Minister Katherina Reiche cautioning that proliferating state aid risks a 'Sammelsurium von Subventionen' without a clear policy compass.
• The experts warn that subsidy‑led policy can skew corporate investment toward anticipated political decisions rather than market opportunities and distract from broader growth measures.
• They call deregulation and de‑bureaucratization the most effective industry policy for now and say any targeted interventions should follow rigorous proportionality analysis.
• With nearly 90% of European emissions set to be covered by emissions trading, the panel argues many climate‑specific industrial subsidies are unnecessary and questions the case for the EU clean‑tech onshoring goal.
• Citing a rise in German state aid and tax relief to about €67 billion in 2024 from €44 billion in 2021, the analysis flags the risk of a subsidy race, while business groups press for faster structural reforms as the economy shrank 0.3% in the second quarter.