What do you think of the German government’s financial policy? Do you think Berlin manages its budget well? Or do you believe that money is often wasted? More and more experts are now warning of mismanagement and high state deficits. Behind closed doors, there is even talk of a tendency towards wastefulness among German politicians.

For projects that the government has set its mind on, the elected representatives simply take away billions of euros and the corresponding goods and services from the citizens. The politicians are often not aware – or they simply don’t care – that they are causing harm through these actions.

With the idea of wastefulness in mind, one also gains a different perspective on the state aid that Galeria Karstadt Kaufhof has received, for example.

How the state supported Galeria Karstadt Kaufhof During the first coronavirus lockdown in March 2020, the recently merged Galeria Karstadt Kaufhof Group came under pressure. Bankruptcy was prevented thanks to successful negotiations with creditors and the prospect of government aid. The first loan amounted to 460 million euros, and later the financial aid was increased to 680 million euros. According to tagesschau.de, the Galeria board stated that these aids posed no risk or disadvantage for taxpayers. But now, with the bankruptcy of Galeria’s investor René Benko, the money is at risk.

What is bitter for German taxpayers is that it seems the company did not even need the state aid to survive. According to tagesschau.de, Benko’s team called the federal and state guarantees a „once in a lifetime gift by the German State“. At least, this is what the „Bild am Sonntag“ reported – the Federal Ministry of Economics declined to comment.

Millions have already been written off The fact is: Germany granted Galeria Karstadt Kaufhof a loan, and repayment is highly doubtful. Most of the state aid has already been written off. According to tagesschau.de, Oliver Olpen from the Federal Ministry of Finance explained in a government press conference that only 88 million euros of the original 680 million euros remain in the books.

In general, the government should consider when state aid is reasonable in crisis situations. Economist Stefan Kooths from the Kiel Institute for the World Economy (IfW) explains on tagesschau.de that it is crucial whether „the state supports companies that are exposed to a shock event that is clearly temporary, or whether it is trying to resist structural change as a whole.“ In the first case, aid can have a stabilizing effect, while in the second case, it only preserves structures that cannot remain competitive in the long run. „In this way, the state is only burning taxpayers‘ money.“ There has been massive criticism regarding Galeria Karstadt Kaufhof, that even with generous state aid, the company would not become competitive again.

What you should do now When the state burns taxpayers‘ money, it always indirectly affects your assets. Therefore, you should take action to protect your assets. What you can do, can be read in „Sicheres Geld“, a consulting service for critical investors who want active asset protection.

For loyal readers, the recommendations from „Sicheres Geld“ have been very beneficial in the past, as they were able to protect and increase their assets despite the crisis in the last two years.