Scrapping bonus exceeds allotted €1.5 billion budget

Scrapping bonus exceeds allotted €1.5 billion budget
Photo: DPA
The €1.5 billion allotted for the German Abwrackprämie, or scrapping premium, has been spent, according to of the Federal Office of Economics and Export Control (Bafa) on Wednesday.

The programme, which began in February, offers Germans €2,500 to junk their old car and buy a new one. The scrapping initiative was initially allotted enough for 600,000 applications. After receiving 600,000 applications, that sum has been spoken for, Bafa spokesperson Michael Rosteck said on Wednesday in Eschborn.

As of early afternoon on Wednesday, Bafa had received about 800,000 applications. Of that sum, 441,000 were submitted to Bafa directly, while 356,000 were entered in the new online system launched on Monday.

Meanwhile the online application site for the scrapping premium crashed on Monday – it’s very first day – according to German weekly magazine Der Spiegel. The problems were associated with “difficulties loading and filling out the reservation application,” the magazine said. Rosteck admitted that further problems with the system could occur, though Bafa was working on optimising the website.

Eligible applicants will get their money even though the number of applications has exceeded the initial €1.5 billion cost, though. They will have to wait between six and eight weeks for the money to come through, and wait times may vary due to strong demand for the programme, Bafa said.

“No one needs to worry that he or she is no longer in line,” government spokesperson Thomas Steg said in a statement, adding that the programme would definitely be offered throughout 2009.

When the programme initially launched on February 20 as part of the government’s second economic stimulus plan, government spokesperson Ulrich Wilhelm had said there was no sign that the allotted budget wouldn’t be sufficient.

German Chancellor Angela Merkel and Foreign Minister Frank-Walter Steinmeier said last week that they would consider extending the scrapping bonus due to its “great success” in helping the nation’s ailing auto industry. Car sales have reportedly increased significantly since it began.