High energy prices, disruptions in supply chains and a new US subsidy scheme that threatens to drain investment from Europe may push one in four enterprises to leave Germany, CEO of Federation of German Industries (BDI) Tanja Gonner told German newspaper Welt on Saturday
BERLIN (Pakistan Point News / Sputnik - 26th November, 2022) High energy prices, disruptions in supply chains and a new US subsidy scheme that threatens to drain investment from Europe may push one in four enterprises to leave Germany, CEO of Federation of German Industries (BDI) Tanja Gonner told German newspaper Welt on Saturday.
"High energy prices and flagging economic activity are hitting the German economy hard and placing a heavy burden on our companies in comparison with other countries of the world. The German business model is under enormous stress," Gonner said, adding that "one in four German companies are thinking of relocating production abroad."
Such sentiments are fueled by soaring prices, disruptions in supply chains, aftershocks of coronavirus-triggered lockdowns in China and the Inflation Reduction Act, a landmark US Federal law that unlocks billions of Dollars in subsidies for new technologies and sustainable growth of the US economy. BDI views the initiative as a grave risk to Germany's industries.
The bill, signed into law by US President Joe Biden in August, commits $300 billion toward deficit reduction, in addition to providing approximately $369 billion in funding for energy security, including tax credits for US-made electric vehicles and subsidies to US consumers, and $80 billion to increase Internal Revenue Service tax enforcement and operations.
The European Union deems the act "discriminatory" toward goods imported to the US. French President Emmanuel Macron also took a swipe at the package, calling it unfriendly and non-compliant with the World Trade Organization provisions.
