Subsidy

The term subsidy comes from the Latin subvenire = " come to the rescue ." The definition of subsidy disputes between lawyers and economists. A legal definition is found, after all, for example, in § 264 paragraph 7 of the Penal Code for subsidy fraud.

Social welfare transfer payments such as unemployment benefits, training assistance and pension grants are therefore legally no subsidies.

An internationally accepted definition of the term subsidy there is not however (as yet). Such would be necessary and desirable in order to make a clear delineation of dumping can, as " the movement of a country's goods to the market of another country under its normal value " is defined as " price discrimination between national markets" or.

Legal definition

A specific legal definition in § 264, there is section 7 of the Criminal Code for subsidy fraud:

Is a subsidy within the meaning of that provision

Undertaking or business within the meaning of sentence 1 No. 1 is also a public enterprise.

In European Law State aid is used for the term subsidy. This aid will be integrated via § 264, paragraph 7, No. 2 of the Criminal Code in the subsidy term Penal Code. The concept of State aid under Article 107 TFEU (ex Article 87 TEC) is characterized by five elements:

State aid is present if all of the above characteristics are met. In Article 107 ff TFEU prohibition on aid details regarding the admissibility are regulated.

The § 12 of the German Stability and Growth Act stipulates that federal funds that are given for specific purposes at locations outside the federal administration, in particular grants, should be granted that it is not contrary to the aims of § 1 [ of the Act].

The § 14 of the German Budgetary Principles Act defines subsidies as " expenditures and commitments for services at locations outside of the Federation or of the country to fulfill specific purposes administration" and follows their warranties to certain conditions: Such may only be " estimated, if the federal government or the country in the fulfillment by such sites has a substantial interest, which can be satisfied to the extent necessary without the grants not or not. "

In economics, the term is further defined. There, the term also includes tax breaks and fee reductions or exemptions and benefits. However, such a definition does not have the liability of a legal legal definition and should be avoided to avoid confusion.

In the political discussion subsidy different terms are often made ​​into an instrument of reasoning, which only corresponds to the commandment of political honesty, if the respective argument base is disclosed and explained; However, this is mostly not the case.

It can be observed after all, according to the above, that - unlike the dumping whose use is usually only private companies - subsidies are predominantly used by the state as an instrument of economic policy. According to U.S. law, but also private benefits, such as companies, banks and organizations, as a " subsidy " apply. This view was probably therefore maintained to have a handle to the ( unwanted ) activities of private compensation funds.

For a better understanding of the nature of subsidies contributes in each case at a consideration of its various incarnations and their formative criteria.

Objectives and criteria

Subsidies are economic actions in order to achieve political and social objectives. These economic actions always require a grant, before sharing or benefit, not being important to the way these benefits in detail.

Types of subsidies ( economic analysis and terminology)

The types of subsidies two basic types are distinguished: production subsidies and export subsidies. The production subsidy is a grant to the industry to promote the production of a product, it is irrelevant whether the product concerned exported or sold in the country of manufacture. An export subsidy is available, however, if the grant is subject to the condition that only cater to those for export in the products concerned.

Subsidies can be awarded by various methods:

In addition to subsidies, there are a number of other government intervention in the economy, such as price fixing or the sovereign state film subsidies. These are subsidies in the sense outlined above, as not specific sectors or individual operators are supported here. The state is rather its responsibilities in the field of general interest to or operated in the context of performance management. Any measures may, however, parallels in effect and purpose of the subsidies.

Subsidies for farms that are not product- bound are referred to as direct payments.

Assessment

Legal issues

An intervention in market events, which is caused by subsidies, then the legal problem if the so-called free trade is legally protected, as is the case within the European Union and between the parties to the World Trade Union ( WTO). That is why Article 107 TFEU contains a general prohibition of subsidies ( in the parlance of the European Union: Aid ), which is however broken by a number of exceptions (European State Aid Law ). A Member State grants subsidies, contrary to this prohibition, the European Commission can explain the allocation of subsidies to EU law and adopt a decision according to which the Member State must demand the return of the subsidy. Where a Member State the granting of subsidies, it is under Article 108 paragraph 3 sentence 1 TFEU committed to this view of the European Commission ( notification ). Within the World Trade Organization, the admissibility of subsidies, including tax subsidies restricts the " Agreement on Subsidies and Countervailing Measures " strong one. Both within the European Community as well as between the Parties to the World Trade Organization, there are often conflicts over export subsidies granted by individual countries to their domestic economy competitive advantage. A particular case is given to those export subsidies contained in the tax laws.

Germany

The Federal Government is required by the Stability and Growth Act to report to the Bundestag every two years on the federal subsidies.

Note: The definition of the term " subsidy " is also addressed in the 20th subsidy report.

Switzerland

The database can be searched according to various criteria. In the years 1997, 1999 and 2008, the Federal Council each published a report on subsidies.