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Robert Habeck defends high subsidies for Intel factory

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Robert Habeck defends high subsidies for Intel factory

Economics Federal Minister of Economics

Habeck defends high subsidies for Intel factory

As of: 6:39 p.m. | Reading time: 3 minutes

Not a bad deal, but well negotiated, says Federal Minister of Economics Robert Habeck

Credit: AFP/TOBIAS SCHWARZ

The federal government is subsidizing a chip factory of the US group Intel in Magdeburg with almost ten billion euros. The “astronomical sum” causes criticism. Vice Chancellor Robert Habeck, on the other hand, emphasizes that the federal government negotiated well.

Federal Minister of Economics Robert Habeck (Greens) has defended the high subsidies for the chip manufacturer Intel against criticism. Initially, investments by the US group in Germany amounting to 17 billion euros were planned, for which subsidies of almost seven billion were planned. Now Intel has almost doubled its investments and the state has gone to ten billion euros, although Intel wants to manufacture even more modern technology here, Habeck said on Tuesday at Industry Day in Berlin.

This is not a bad deal, but well negotiated, according to Habeck. Such high investments should not fail because of three billion euros. Germany faces tough international competition and cannot fund everything with a watering can, but it can target strategically important areas such as batteries and semiconductors.

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Intel invests more than 30 billion euros in Magdeburg. Around 3,000 jobs will be created in the long term. On Monday, the federal government and the US company signed an agreement that provides for state aid from the federal government in the amount of around 9.9 billion euros.

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According to Federal Chancellor Olaf Scholz, it is the largest direct investment by a foreign company in the history of the Federal Republic. The level of subsidies was one of the sticking points in the negotiations. Economists criticized the high state funds that would be better invested in the education system.

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“The astronomical sum that Intel has received as subsidies from the federal government can hardly be justified,” said the chairman of the Federal Association of Small and Medium-Sized Businesses (BVMW), Markus Jerger. It is a worrying development that large investors apparently only decide in favor of Germany as a business location if there is significant public co-financing.

Leading economic research institutes are also critical of the state aid. With statements about Intel, the company was invited to push up the demands, said the deputy head of the Ifo Institute Dresden, Joachim Ragnitz. “Politicians got ripped off because they said we really want you.”

More concessions to Intel

With the planned settlement in Saxony-Anhalt, the federal government made further concessions. Prime Minister Reiner Haseloff (CDU) mentioned on Tuesday in Magdeburg, among other things, agreements on the lowest possible electricity costs for the chip factory. This also includes the development of a concept for competitive industrial electricity. This had previously been discussed with companies and a working group in the Chancellery.

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After the heating debacle

According to information from the dpa news agency, Intel is in negotiations with a local energy supplier about an average electricity price of ten cents per kilowatt hour for 20 years. Should market prices rise excessively during this time, the federal government and Intel want to negotiate how additional burdens for Intel can be absorbed. The “Süddeutsche Zeitung” had previously reported on this.

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