Germany addicted to car subsidy scheme

The ‘grand coalition’ government had allocated €1.5 billion to enable 600 000 motorists to get a €2500 payment for trading in their old car and buying a new one. But with that money running out, and car sales in February up 21.5% on February 2008, it announced the scheme will be extended.

The scrapping scheme has been criticised by economists and environmentalists – by economists for not helping the economy and increasing government debt, and by environmentalists for possibly adding more emissions.

In a letter to an American newspaper, T&E said extending the scheme effectively turned it into ‘a methodone programme for addicted car makers’. It added: ‘Since there has been little progress in improving the fuel efficiency of cars, exchanging an old one for a new one does not cut gas consumption or emissions, especially if you add in emissions from additional car production’.