Funds for car scrapping scheme running out

The budget for Germany’s popular Abwrackprämie, or car scrapping premium, could be exhausted before parliamentary elections in September, daily Bild reported on Tuesday.

Funds for car scrapping scheme running out
Photo: DPA

According to new numbers from the Federal Office of Economics and Export Control (Bafa), the remaining money in the scrapping bonus fund is only enough for some 300,000 new car purchases.

A Bafa spokesman told the newspaper that the government is logging between 7,000 and 8,000 new applications for the scrapping bonus each day. If heightened demand keeps up, the programme’s budget could run out before this year’s parliamentary elections on September 27.

Meanwhile, Saarland Social Democratic leader Heiko Maas suggested extending the scrapping programme through the end of the year.

“Everyone benefits from the Abwrackprämie – consumers, employees and the economy,” he said. “That’s why we need to see whether, regardless of reaching the fund’s limit, anyone who scraps his old car before the end of the year should receive the €2,500 bonus in full.”

Altogether the German government has allocated €5 billion for the programme, enough to fund the €2,500-subsidy for 2 million new cars. The German cabinet already extended the car-scrapping bonus once in April, earmarking a further €3.5 billion for the programme and extending its expiration date from May until the end of the year.

The German Association for Motor Trade and Repair (ZDK) is warning the government against a renewed increase of the program’s budget.

“The Abwrackprämie should not be extended again,” ZDK spokesman Helmut Blümer told Bild. “We fear a drop in sales for 2010 anyway – this would make it even bigger,” he added.

The scrapping bonus is a controversial issue for German citizens as well. According to a poll by the GfK research institute, 39 percent of Germans see the economic stimulus measure in a positive light, whereas 37 percent view it unfavourably.

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.


‘We agree to disagree’: Still no progress in marathon SAS strike talks

By lunchtime on Friday, talks between the Scandinavian airline SAS and unions representing striking pilots were still stuck on "difficult issues".

'We agree to disagree': Still no progress in marathon SAS strike talks

“We agree that we disagree,” Roger Klokset, from the Norwegian pilots’ union, said at lunchtime outside the headquarters of the Confederation of Swedish Enterprise in Stockholm, where talks are taking place. “We are still working to find a solution, and so long as there is still some point in continuing negotiations, we will do that.” 

Mats Ruland, a mediator for the Norwegian government, said that there were “still several difficult issues which need to be solved”. 

At 1pm on Friday, the two sides took a short break from the talks for lunch, after starting at 9am. On Thursday, they negotiated for 15 hours, breaking off at 1am on Friday morning. 

READ ALSO: What’s the latest on the SAS plane strike?

Marianne Hernæs, SAS’s negotiator on Friday told journalists she was tired after sitting at the negotiating table long into the night. 

“We need to find a model where we can meet in the middle and which can ensure that we pull in the income that we are dependent on,” she said. 

Klokset said that there was “a good atmosphere” in the talks, and that the unions were sticking together to represent their members.

“I think we’ve been extremely flexible so far. It’s ‘out of this world’,’ said Henrik Thyregod, with the Danish pilots’ union. 

“This could have been solved back in December if SAS had not made unreasonable demands on the pilots,” Klokset added. 

The strike, which is now in its 12th day, has cost SAS up to 130m kronor a day, with 2,550 flights cancelled by Thursday, affecting 270,000 passengers.