Why Germany is not participating in the EU project

Christian Lindner (left), Robert Habeck (right)

Finance and economy ministers seem to have different ideas on how to support the pharmaceutical sector.

(Photo: dpa)

Berlin A videoconference can hardly be better equipped. Among others, Chancellor Angela Merkel (CDU), French President Emmanuel Macron, European Commission President Ursula von der Leyen and Biontech boss Ugur Sahin spoke in May 2021 about the future of the healthcare sector.

They came to the conclusion that, in the interest of its sovereignty, Europe must massively promote the sector in order to withstand stronger international competition and not become dependent on China, India and the United States. United. They drew up a plan: an “Important Project of Common European Interest” (IPCEI) should be created for the healthcare industry. In the meantime, the plan has become a concept supported by 16 EU countries – with the exception of Germany. The excitement in politics and business is great.

IPCEI designates important projects of common European interest. Businesses can apply to participate, which enables them to receive substantial government grants, loans and guarantees – far more extensive than normally allowed under EU state aid law. So far, there are such projects for hydrogen, battery cells, chip industry and cloud.

The absence of Germany in the pharmaceutical project is doubly surprising. The new federal government had promised increased resilience in health care. At the same time, Economy Minister Robert Habeck (Greens) has made an active industrial policy one of his most important projects.

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According to information from the Handelsblatt, Germany’s participation did not fail because of Habeck either. In fact, the Vice-Chancellor already had a ministerial proposal on his desk for engagement in the project, government circles report. But the Ministry of Finance did not want to release the funds, it is said.

Businesses and unions make representations to ministers

In a letter, an alliance of big pharma, including market leaders Johnson & Johnson, Roche and Novartis, as well as the IG BCE union, has now personally addressed Habeck and Finance Minister Christian Lindner (FDP).

“Dear Federal Ministers, we urge you to use the remaining window of time and consider how Germany can join this central initiative,” says the letter, which is available to the Handelsblatt. Otherwise, Germany threatens to “slip into the location competition”.

>> Read also here: The corona virus arms itself, but so does the pharmaceutical industry

The time window is almost closed. The industrial policy project is divided into two phases. The companies’ first applications will be submitted to the European Commission in June, but Germany is already too late for that.

The second phase is scheduled for October. If the federal government started collecting business needs in the next few days, that might barely be enough. But it doesn’t look like that either.

According to the manifesto of the other 16 EU countries, projects to develop innovative and environmentally friendly technologies for the production of medicines, innovations for the treatment of rare diseases and to respond to future pandemics as well as the development gene and cell therapies are funded . According to government circles, half a billion to one billion euros should be released from the federal budget.

The Ministry of Finance, which has only contacted the Ministry of the Economy on request, wants it, but obviously will not provide it, at least for the current year. Habeck’s house explains that the manifesto could not be signed at all because the budget is still being coordinated.

Dependence on China, India and the United States “has increased significantly”

In principle, it is possible to join the project later. “Germany has contributed very actively to the design of a Health PIIEC in recent months,” she says.

However, the project is not found in the statements of the quasi-unified federal budget for the current year. Financial room for maneuver is limited given the war in Ukraine, high energy prices and the consequences of the pandemic.

At the same time, Lindner wants to allow the debt brake to apply as normal again in the coming year. Apparently, there is no more money for the pharmaceutical industry, which has earned quite a lot in recent months anyway.

Peter Altmaier

Germany’s industrial strategy essentially goes back to the former economy minister.

(Photo: imago images/Chris Emil Janssen)

But this is too short-term a vision, contradict industry representatives. Reliance on China, India and the United States has increased dramatically in recent years, says Claus Michelsen, chief economist at the Association of Research-Based Pharmaceutical Manufacturers (VFA).

“Particularly in the field of innovative medicines, where development and production go hand in hand, the risk of Europe losing ground is growing,” he says. Europe can only counterbalance this with an IPCEI. The representatives refer in particular to medium-sized companies, which, unlike the pharmaceutical giants, are less known to the general public.

There are also problems of intra-European competition

This includes IDT Biologika, which also signed the letter to Habeck and Lindner. The Saxony-Anhalt company, which has 1,600 employees, is working to make vaccine production more efficient. During the pandemic, Johnson & Johnson and Astra-Zeneca relied on IDT.

The company can look back on more than 100 years of history. However, general manager Jürgen Betzing is now worried about the future. “The United States and Asia, particularly China, have recognized the importance of new technologies in the pharmaceutical and biotechnology industries. There is massive funding and also structural support,” he says.

>> Also read here: How Europe is becoming the leading biotech location

We can already see that young scientists with ideas that could change the world prefer to settle in China or the United States rather than in Germany. “If we cannot stop this development, the consequences would be devastating,” warns Betzing.

He also points out that it’s not just about competing with China and the United States. “The fact that Germany has so far refused PIIEC Health also puts us in difficulty in European competition,” he said.

France has already pledged 1.5 billion euros for its health industry for the first round. “Some companies and scientists might not want to go to the United States or China at all – but they certainly wouldn’t have a problem with France or the Netherlands if the conditions were so much better there,” he said. worries Betzing.

The federal government is also likely to have a long-term interest in IDT. Berlin has signed contracts with the company to supply vaccines until 2029.

After: Mysterious takeover bid for Siltronic – the sign of Habeck’s industrial policy

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