The Federal Cabinet approved the 2019 draft budget for the Federal Ministry for Economic Affairs and Energy on 6 July 2018. It is worth an overall €8.188 billion (2017: €7.735 billion, 2018: €8.115 billion), and is largely based on the key figures. It includes additional funding in 2019 for research and development (+€132 million), for innovative start-ups (+€38 million), for digitisation of SMEs (+€30 million) and for promotion of foreign trade and investment (+€30 million).
By providing investments and funding, the Federal Ministry for Economic Affairs and Energy aims to foster growth, innovation, and employment. Many of the funding measures are designed to strengthen SMEs in particular, especially via the promotion of research, development and innovation.
By including additional funding for research and development for 2018-2022, the budget is gradually approaching the goal of 3.5% in 2025 set out in the coalition agreement. Up to 2022, a total of approximately €713 million has been allocated under departmental budget 09.
For more detailed information on the budget, please refer to the spending overview.
The individual policy areas:
Innovation, technology and new mobility
- Promoting innovation and providing related advice
The forms the heart of the support available for innovative SMEs. The volume of the programme is to be increased by €10 million to approximately €559 million in 2019. At least 40% of this funding is to be allocated to companies in the New Länder.
The provides SMEs with vouchers for targeted advisory services worth more than €7 million, thereby supporting them as they develop innovative products and processes.
- Industrial research for companies
€245 million has been set aside to fund industrial research by companies. This funding will be used to support pre-competitive research work that offers high potential for implementation, and to fund projects conducted by external, not-for-profit research establishments which do not receive public institutional funding.
- Transfer of technologies and innovation
Under the TuIT umbrella programme, some €30 million is available to support the transfer of technology and innovation. This includes funding to safeguard and harness intellectual property and to advance standardisation.
- New mobility
Out of €128 million set aside for the maritime industry and for transport technologies, approximately €105 million will be used for the maritime industry (€69 million) and new vehicle and system technologies (€54 million). The allocation for shipbuilding innovation aid (€25 million) has been repeated in 2019.
- Aerospace and the German Aerospace Center (DLR)
The 2019 budget for promoting research in the aerospace sector – an industry that is particularly high-tech – is around €164.5 million. The programme has been increased by more than €8 million from the 2018 figure. Including the institutional funding for the German Aerospace Center (DLR), approximately €1.587 billion is available for space research (including aviation, energy and transport) in 2019. Of this, €271 million has been allocated to the National Space Programme. The budget for international cooperation within the European Space Agency (ESA) stands at around €857 million in 2019. This funding serves to finance the use and operation of the International Space Station (ISS). By providing this funding, the Federal Ministry for Economic Affairs and Energy is promoting advances in space technology, and is making a major contribution towards ensuring that the European and German space industries remain competitive.
- Digital Agenda
Funding under the Digital Agenda exceeds €432 million. The bulk of this funding is earmarked for an ongoing European microelectronics programme to boost the ability to innovate and the competitiveness of European industry, with spending of €275 million in 2019 and a total of €1 billion for the entire financial planning up to 2021. Another focus is on the development of digital technologies, with more than €65 million allocated to them.
Approximately €44 million is available to foster a widespread take-up of state-of-the-art ICT technologies in SMEs and the skilled crafts sector (“Mittelstand digital”). Over €33 million is allocated to the field “Potential of the digital economy” which includes measures to boost IT security in SMEs. The funding for this has been doubled.
SMEs: start-up, grow, invest
- The New Age for Entrepreneurship initiative
Overall funding for innovative start-ups totals approximately €129 million in 2019. Amongst other things, the EXIST funding programme is to foster a culture of entrepreneurship at universities and research establishments, and to increase the number of spin-offs from scientific institutions. The funding available for this in 2019 has been almost doubled to €78 million. The INVEST grant for business angels wants to strengthen the market for venture capital in Germany. In 2019, a total of €46 million will be available under the programme.
In addition to this, funding for technology-driven start-ups will again be available from the High-tech Start-up Fund, which, since 2013, has been entirely financed by the ERP Special Fund.
- Closing the skills gap / vocational training
Some €26.5 million of the 2019 budget has been set aside to ensure a secure supply of skilled labour. Of this, approximately €8 million is being provided to raise awareness and inform companies and skilled workers in 2019. In the context of securing the supply of skilled labour, the budget contains approximately €4.5 million for measures like the Alliance for Initial and Further Training for joint initiatives organised with the Länder and social partners.
Another €5 million has been dedicated in 2019 to the development of social skills as part of vocational training courses. The teaching of social skills is to raise the probability that trainees will complete their courses and get a job, as well as to feed into the interministerial strategy to promote democracy and prevent extremism.
The vocational training programme (approximately €78 million) supports courses in the skilled crafts sector outside companies providing the training, and helps to establish, modernise and equip such training centres for trade and industry.
- Promoting the regional economy
A total of €600 million is earmarked in 2019 for promoting investment under the Joint Federal/Länder Task for the Improvement of Regional Economic Structures (GRW). Together with the cofunding from the Länder, it will be possible for approximately €1.2 billion of funding to be mobilised for new investment projects by trade and industry and for measures to improve local commerce-related infrastructure in regions that are structurally weak. In addition to this, the Economic Affairs Ministry intends to draw on the priority funding from the coalition agreement. The total of €1.5 billion is currently held in departmental budget 60, which is managed by the Finance Ministry as several ministries are claiming entitlement to portions of the funding.
- Promoting business skills and expertise
In 2019, the government will be providing some €39 million to promote business skills and expertise among German SMEs in particular. This will be done through a scheme that uses various measures to encourage small and medium-sized companies to consult with external business specialists at an early stage and on any and every aspect of management.
- Venture capital funding for small start-ups (venture debt funds)
In 2019, €47.5 million will again be allocated to provide insurance against the risk of default from “hybrid” forms of finance in the Economic Affairs Ministry budget. The funding is intended to help SMEs which cannot obtain loans on the regular capital market.
- Potential in the services market
Some €21 million of the 2017 budget has been earmarked to support and develop up-and-coming lead markets in the services sector and to harness the potential of the cultural and creative sectors, the healthcare industry, and others. This includes a €10 million programme to promote the film industry, which is to boost Germany's competitiveness and capacity for innovation as a production location for films. Particular attention will be given to using modern German technology.
Energy and sustainability
- Research and development projects
The 2019 budget will provide approximately €434 million for the implementation of the 6th Energy Research Programme, which supports research and development in the fields of energy efficiency, renewable energies, and nuclear safety.
- Phasing out subsidies for hard coal / rehabilitating mines (Wismut GmbH)
Based on the agreement to phase out subsidies for hard coal mining, a total of approximately €1.035 billion has been made available for hard coal mining and for the re-adaptation benefits paid out to older employees leaving the industry.
In the 2019 budget, funding of €158 million has been allocated for the ongoing rehabilitation and revegetation of the former uranium mining sites in Saxony and Thuringia by Wismut GmbH.
- Energy-efficient retrofitting of buildings
Some €286 million has been earmarked for energy-efficient construction and the retrofitting of buildings under the KfW’s CO2 Building Modernisation programme. The projects in question were approved in the period up to 2011. The programme is a key element of the energy transition and a vital instrument for the Federal Government as it works towards its energy and climate targets for buildings. All funding for projects approved under this programme after 2011 has been financed exclusively by the Energy and Climate Fund (see below).
Opportunities afforded by globalisation
- Breaking into markets abroad
The various schemes designed for export promotion have been packaged together to create the Programme to Develop Foreign Markets (€100 million). The budget item is being sharply increased in 2019 with a view to using an additional €30 million to develop new markets in Africa in particular. The new programme consists of various export initiatives, foreign trade fair stands, the manager training programme, and Germany’s membership of the EITI (Extractive Industries Transparency Initiative).
- Promotion of foreign trade and investment by GTAI and bilateral chambers of commerce
Germany Trade and Invest (GTAI), the German state-owned enterprise tasked with promoting foreign trade and inward investment, has an important role to play. The government will supply a total of approximately €91 million in funding for GTAI and the network of bilateral chambers of commerce.
- Other spending approved:
Further to this, funding from this chapter will also be made available to the long-term, large-scale project entitled 'Construction of an urban railway in Ho Chi Minh City', for Germany’s participation in World Expositions (approximately €15 million), the country’s membership in international organisations based outside Germany (including the WTO, ITU and OECD), and the institutional support granted to the German National Tourist Board (DZT; approximately €34.3 million).
Other spending approved
In addition to expenditure on communicating and evaluating economic policy and technology policy projects, chapter 0910 provides some €51 million for research and for the Federal Government’s contribution to the budgets of the 8 institutions that are members of the Gottfried Wilhelm Leibnitz Scientific Association and for which the Federal Ministry for Economic Affairs and Energy has been designated as the responsible government agency, €5.5 million for the holding of the 2019 Internet Governance Forum in Germany, and €3.1 million for priority projects conducted on behalf of the Federal Government Commissioner for the Affairs of the New Federal States. Also, €2 million is allocated for the .
Energy and Climate Fund
The Energy and Climate Fund continues to be the most important financial instrument for the energy transition. The financial plan for the Energy and Climate Fund envisages programmatic spending of approximately €4.5 billion. The Economic Affairs Ministry manages roughly 83% of the total volume. A key item here continues to be the retrofitting of buildings to improve energy efficiency, for which approximately €2 billion is available. Fresh emphases are being placed in the field of energy storage and heating grid systems, and the Clean Air 2017-2020 Action Programme is continuing to receive funding as planned. The federal grant is rising from €2.8 billion to €3.057 billion. €1.607 billion is being taken from the reserve. Only €1.248 billion is being added to the reserve, i.e. €359 million less. €1.213 billion is planned as revenue from the auction of CO2 certificates. This is based on a cautious assumption about the price development, not least because far lower volumes are expected to be auctioned in the coming years.