The Prodigal German State

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Green energy, brought to you by government subsidies. Picture source: Reuters

Angela Merkel may now be touted as one of the last world leaders who embraces liberal values, but a new report Monday shows that the German government is ramping up state subsidies for things like electric cars, coal miners and the children of wealthy entrepreneurs.

The state subsidy report, which was obtained by Handelsblatt, says that government subsidies and tax incentives will rise to €25.2 billion ($30 billion) in 2018, an increase of 17 percent over the level in 2015. As a percentage of GDP, Germany now has the highest level of subsidies in the European Union.

Despite promises to subject new subsidies to an intensive review, Ms. Merkel’s governing coalition has rolled out 11 new government handouts, for things like the purchase of an electric car and cleaner diesel vehicles. Coming three months before parliamentary elections, this may be designed as a partial response to the scandal about diesel car pollution.

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