Companies DAX companies receive billions in subsidies from the state

Germany's largest stock exchange groups have achieved triple-digit billion profits in recent years - and at the same time received high state subsidies. In 2023 alone, at least 10.7 billion euros flowed to the 40 DAX companies, according to a study.

That was almost twice as much as the previous year's figure of 6 billion euros. This was the conclusion of an analysis by the Flossbach von Storch Research Institute, a think tank of the Cologne-based asset manager of the same name with over 70 billion euros in client assets under management.

While subsidies amounted to around two billion euros per year until 2018, the amount rose sharply in the following years. In total, around 35 billion euros of state money went to the largest stock exchange groups between 2016 and 2023.

"The extent to which profitable corporations have been supplied with public money has risen dramatically over the past few years," wrote analyst Philipp Immenkötter. The total amount is conservatively estimated, as companies have room for maneuver, which they characterize as subsidies in their annual reports. The figures are remarkable as the German government is also struggling to make savings in its budget.

The study analyzed data from the DAX companies in their annual reports. In the fall of 2021, the number of Dax members rose from 30 to 40 as part of a reform, so today's 40 Dax members were traced back to 2016 to avoid distortions.

Eon and Volkswagen received the most money

There are indeed arguments in favor of subsidies, Immenkötter wrote. Nevertheless, the question arises as to "whether there is an economic necessity to support or promote the Dax companies to this extent with taxpayers' money." According to the study, the net profit of the DAX companies amounted to 117 billion euros in 2023.

The energy company Eon has received the most subsidies since 2016 with more than 9.3 billion euros. Volkswagen followed with 6.4 billion euros. Among other things, the car manufacturer received tax breaks and subsidies for research into drive and digital technology. BMW came in third with 2.3 billion euros, including subsidies for the construction of production sites.

Crises and climate change as drivers of subsidies

11 of the DAX companies each received more than one billion euros in subsidies between 2016 and 2023, according to the report. The average (median) was around 200 million euros. Indirect subsidies, such as the environmental bonus for private households when purchasing e-cars, were not included in the study - but they are an indirect subsidy for the automotive industry.

Immenkötter wrote that the reason for the increase in subsidies was mainly due to the decisions made by the "traffic light" government and the grand coalition. These include the plan to transform the economy and support it during the coronavirus pandemic and the war in Ukraine. The money came from the Climate and Transformation Fund and the Economic Stabilization Fund, among others.