Germany: The ifo Institute takes a Critical View of Regional Policy in Lignite Mining Areas
The ifo Institute takes a critical view of the recommendations of the German Coal Commission on structural change. "The commission's report is largely characterised by the idea that politicians have a responsibility to create new economic structures in a region. However, all experience with an active structural policy shows that the state can at best set the framework conditions for private investors, first and foremost by expanding infrastructures and supplementing this with the use of funding policy instruments. If the commission's recommendations were adopted by politicians, there would be a great danger that a lot of money would awaken false and ultimately illusory ideas," says Joachim Ragnitz, Deputy Managing Director of the ifo Dresden branch.
"It is reasonable and understandable that the German lignite regions want to use their competences in the energy sector in the future as well. But the proposals contained in the commission report on the further development and use of digital technologies often do not fit in with the economic structure of the regions concerned. Moreover, this sector in particular is characterised by such major changes that it is not convincing to draw up a regional development concept for the next 20 years on this basis," Ragnitz continues. Many detailed measures would hardly have any effect on regional economic development and would rather reflect the current wishes of the local actors. "The renovation of swimming pools or the construction of cycle paths really has nothing to do with the accelerated phase-out of lignite, and is a task that is entirely incumbent on the Laender and their municipalities. The federal government should therefore take a very close look at whether additional financing is really needed for this. The commission's recommendations can only be seen as proposals which bundle the interests of different groups, but not as a final, politically binding basis for decision-making.
