12.10.2022

Support Measures for Companies

WIFO Research Brief on Mitigating High Energy Costs

According to a recent WIFO Research Brief by Michael Böheim, Ulrike Huemer, Claudia Kettner, Daniela Kletzan-Slamanig and Margit Schratzenstaller, support measures for companies to cushion high energy costs should be limited to those companies that cannot pass on their costs because they are in international competition.

In order not to distort the internal market, a coordinated approach at European level should be sought in principle and national "isolated solutions" should be preferred. From an ecological perspective, a suspension of national emissions trading and the energy cost subsidy for companies presented by the German government at the end of September 2022 should be viewed critically.

With the concrete programme design of the energy cost subsidy for companies, the federal government has opted for a broadly rolled-out subsidy regime, accepting correspondingly high deadweight losses, and against targeted support for companies with intact business models. A general loss carryback combined with liquidity support (guarantees) and a reduction in non-wage labour costs would have been more budget-friendly and economically efficient.