German cabinet approves measures for better access to capital markets

9:59 am Wednesday, November 27th, 2024

BERLIN (Reuters) -Germany’s cabinet on Wednesday approved a package of measures to promote startups and improve access to capital markets, government sources said, though it was unclear if it could get green-lit by parliament before February elections.

The so-called Second Financing for the Future Act is meant to boost anaemic economic growth, in particular by improving the tax framework for investments in venture capital.

It includes measures to remove obstacles to investment in infrastructure and renewable energies and cut bureaucracy.

“Tax conditions are the decisive criteria for entrepreneurs when considering whether to set up in Germany,” Finance Minister Joerg Kukies said in a statement. “This is where the law comes in.”

Germany’s parliament passed the first Financing for the Future Act, one year ago in a bid to make Germany more attractive for entrepreneurs.

It is not clear if the current minority government of Social Democrats and Greens will find a majority to get this second law through the two houses of parliament before the election on Feb. 23.

The act was largely drawn up by former finance minister and leader of the Free Democrats Christian Lindner.

His party could still support the plan in parliament even after Chancellor Olaf Scholz fired him on Nov. 6.

That support would create the required majority to pass the law. The FDP leadership said it would first have to examine the draft law before deciding.

The project is one of the 49 measures from the government’s growth initiative that is meant to strengthen Germany as a business location.

Germany’s startup association said the Financing for the Future Act was an important step to facilitate initial public offerings.

“Since 2007, the number of companies listed in Germany has almost halved,” said Christoph Stresing from the Startup Association, with many companies moving to the U.S.

“That is alarming,” Stresing said. “We need further steps.”

According to the association, German start-ups have a financing gap of 30 billion euros per year.

($1 = 0.9500 euros)

(Reporting by Christian Kraemer, writing by Maria Martinez, editing by Miranda Murray and Andrew Hedavens)