Poor But Sexy But Inter-State Fiscally Adjusted

Berlin is.

Waste

Here’s a new German word for you: Länderfinanzausgleich. In a nutshell, this means that wealthy German states like Bavaria and Hesse (so-called donor states) are obligated to subsidize poor but sometimes sexy German states like Berlin and Bremen (so-called recipient states) because, well, hell if I know why.

This is also known as “inter-state fiscal adjustment” here. You know, good old fashioned Umverteilung (redistribution of somebody else’s money) or subsidies, if you prefer.

Anyways, Bavaria and Hesse, for one (or two), are mad as hell and aren’t going to take it (or give it) anymore and are bringing an action before the German Verfassungsgericht (Supreme Court) claiming that this type of thing is constitutionally imbalanced and needs to be done away with – at least when it comes to Berlin because the Berlin city/state government consists of a worthless bunch of lazy and wasteful bums who are completely out of control when it comes to spending and would never think of stopping their spending if they aren’t forced to, which is, well, a pretty accurate analysis of the situation here.

This will probably go nowhere, however, because Germans are big fans of something they like to call Solidarität (no English equivalent that I can find other than maybe “supporting lazy and wasteful and sometimes sexy bums”).

“Das Gesamtsystem leidet unter einer zu weitgehenden Nivellierung der Länderfinanzkraft, die den politisch Verantwortlichen eines Landes das Eigeninteresse nimmt, Maßnahmen zur Stärkung der originären Steuerkraft zu ergreifen.”

European Subsidies Not Enough For Airbus

Now they need American ones, too.

Brussels on Thursday sought WTO approval for trade sanctions against Washington worth $12 billion a year.

“On the one side we have $90 billion (70 billion euros) of illegal financing of Airbus by the EU and on the other side we have $3.0-$4.0 billion for Boeing.”

State Subsidies In Action

This would be funny if wasn’t so funny. Where do we want to go broke today? Q-Cells is now the fourth major bankruptcy in the German solar industry sector of late and although they are sure to have made a lot of dumb mistakes themselves, they certainly couldn’t have gone bankrupt “this well” without the German government’s relentless and merciless help.

It’s all about drugs, subsidy drugs. And once these subsidy drugs had been administered – in this case promoting wonderful and environmentally friendly solar technology for the good of all German-kind (in a country where sunshine is still a news item) – most of these companies failed to wean themselves from their reliance upon them and made some bad business decisions as a result (decisions they wouldn’t have made if they had been clean).

In the meantime, Asian competitors in the real world learned to produce the solar technology cheaper (as usual) and, just to add a little insult to injury here, it turns out that the German government helped the Chinese solar industry with financial aid , too. Only they did this better than they did in Germany.

Then Berlin finally got tired of shelling out all this money back home and started reducing the dosage faster than the addicts could adapt to and, well,  the rest is history, or Geschichte, if you prefer.

So what’s the moral of the story? Remember those nine most terrifying words in the English language: “We’re from the government and we’re here to help.”

Somehow the German government must have lost sight of the fact that its policy in fact encourages the demise of Germany’s own solar industry. The development bank of the government-owned KfW group of banks supports China’s green industry with low-interest loans. Ironically, the German Investment and Development Company (DEG), also a subsidiary of KfW, is one of the financial backers of Chinese industry giant Yingli Solar.

Artistic Productions Like This Cost Money You Know

We’re artists. So give us your, I mean our money.

This is what Germans get for a billion euros of arts subsidies each and every year. Jiminy Crickets. I don’t even want to think about what they’d be getting for less.

Please, Berlin. For the love of all that is holy freakin’ cow. Keep those subsidies coming.

“Der Kulturinfarkt: Von allem zu viel und überall das Gleiche.”

Cut The Loses And Run

The German government is about to cut solar subsidies by 30%.

Despite the massive investment, solar power accounts for only about 0.3% of Germany’s total energy. This is one of the key reasons why Germans now pay the second-highest price for electricity in the developed world (exceeded only by Denmark, which aims to be the “world wind-energy champion”).

According to Der Spiegel, even members of Chancellor Angela Merkel’s staff are now describing the policy as a massive money pit. Philipp Rösler, Germany’s Minister of Economics and Technology, has called the spiralling solar subsidies a “threat to the economy.”

German Solar Energy Firms Still Waiting For Sun

And it’s November now, too. Ever spent a November in Germany?

The once “model company” Roth & Rau is the latest victim of… Was eigentlich (of what)?

“Solar companies have relied on tax credits or other forms of subsidy for their customers to buy and install the product.” These subsidies are now drying up in Germany. Hmm. Might there be a connection here?

“The logic was that as the price of oil goes up it generally benefits the oil companies but also creates more perceived need for solar products. When oil prices went down it generally hurt oil companies but created less urgency for solar products.” Well, that dynamic doesn’t seem to apply anymore.

Maybe this will all change again once the sun comes out. And once most of the solar energy companies out there have gone the way of the dinosaur.

Die Solarbranche steckt in einer schweren Krise: Die Nachfrage ist nach Förderkürzungen in mehreren wichtigen Märkten wie Deutschland und Italien eingebrochen. Gleichzeitig steigt das Angebot, weil vor allem in Asien etliche neue Fabriken eröffnet wurden.

Buy German – or Czech if you prefer

So much for my theory about this being a German car subsidy conspiracy plan. What a lemon, this German Abwrackprämie or cash-for-clunkers idea has turned out to be. If you work in the German car industry, that is.

Buy-a-wreck?

The government stepped in as usual and helped everybody again and no force in the universe could stop them, as usual again. But this time it was the German government helping out the Czechs, unintentionally of course. I know this sounds complicated at first but that’s only because it actually isn’t.

Since Berlin has been shelling out 2,500 euros to anybody who trades in his or her old wreck for a new one, I mean a new car, Skoda’s production plants have been at full production, if you get my drift. Hyundai, Renault and other foreign plants have been profiting from the handout, too.

Hey, the government meant well. They always do. Now if one could only find out how to stop them from helping maybe things might finally start moving forward here.

“Since the end of March, we are in full production — five days a week, on three shifts.”