Economic Expert Calls for Withdrawal of Restaurant Subsidies
Monika Schnitzer, chairwoman of the Council of Economic Experts, advocates for the abolition of the VAT reduction in the hospitality sector. She views the…
Call for Withdrawal of VAT Reduction
Monika Schnitzer, the chairwoman of the Council of Economic Experts for the assessment of overall economic development, has clearly opposed the VAT reduction for the hospitality sector. In her opinion, this regulation costs the state around 3.4 billion euros annually and does not meet the promised goals, particularly the rescue of rural inns. Instead, it primarily benefits large chains like McDonald's and Burger King, which Schnitzer describes as one of the "most unnecessary subsidies in a long time."
The situation in the hospitality sector is alarming: According to an analysis by the economic information service Creditreform, insolvencies in the industry have risen for the fourth consecutive year in 2025. The originally intended relief measure of reducing the VAT on food from 19% to 7% has apparently not achieved the desired effect. For investors, the question arises as to how such subsidies may long-term affect the competitiveness of the sector, either positively or negatively.
In this context, the black-red coalition has announced reforms that also include the reduction of subsidies. Schnitzer argues that all aids that create a false steering effect should be on the chopping block. This includes the tax concession on diesel, which she believes should have been completely abolished. This could have potentially mitigated the resistance from farmers and spared the traffic light coalition a return to the original plans.
Another central point that Schnitzer raises is the state of infrastructure in Germany. In her view, there has been too much reliance on wear and tear, instead of proactively investing in the future. "We are essentially living off our substance," warns the professor from Munich's Ludwig Maximilians University, calling for a comprehensive discussion on future technologies.
Schnitzer expresses particular concern about developments in artificial intelligence, which are advancing at a rapid pace in the USA. Germany urgently needs to create the necessary infrastructure to remain competitive in the global market. This challenge could be crucial for the future growth and competitiveness of the German economy and is of great significance for investors focused on sustainable shareholder value.