The Federal Court of Auditors has sharply criticized the Ministry of Economic Affairs led by Robert Habeck (Greens), because it is giving away half a billion euros in subsidies for digitization in companies and not distributing them according to actual needs.
The ministry awards funding opportunities according to the watering can principle, instead of setting clear conditions, according to a report by the auditors, which is available to the editorial network Germany (RND/Wednesday). Therefore, the audit authority assumes that the Habeck Ministry spends the funding “largely ineffective” due to high deadweight effects.
For reasons of economy and economy, the Ministry of Economic Affairs (BMWK) must not support companies that are economically able to make profitable investments in digitization even without state subsidies, the Court of Auditors warned. “The BMWK only insufficiently checked this,” said the criticism. The auditors asked the Habeck Ministry to stop the raffle immediately and to set suitable funding criteria.
Specifically, it is about the funding program “Digital Now – Investment Funding for Small and Medium-Sized Enterprises” launched in 2020. With non-repayable grants, it promotes investments by these companies in digital technologies and the qualification of their employees.
When applying, the Ministry hardly asks for any information on the economic performance of the company and the profitability of the investment. This led to a run on the funding program, which had to be repeatedly suspended due to exhausted budget funds. Since 2021, it has therefore been decided by lot which companies are allowed to apply for funding. Companies that were not drawn can participate again in the following months. The Federal Court of Auditors had already criticized the ministry before the program began because of the lack of funding criteria. However, the Ministry of Economic Affairs stuck to its plan and feels confirmed by the large number of applications.
However, the Court of Auditors sees things differently: “The number of applications is not evidence of a high need for funding,” according to the auditors. Rather, the many applications are due to the fact that the Ministry does not take sufficient account of the economic performance of the companies and the profitability of the investments. Instead, the Federal Court of Auditors assumes that there will be a high deadweight effect, because up to 2.5 million companies could be funded. Among them are many economically efficient companies that do not need funding, the examiners criticized. “The BMWK should stop the raffle immediately,” demanded the Court of Auditors. With clearly defined, measurable funding criteria, the ministry can better control the quality and quantity of the applications, according to the recommendation of the senior auditors.