Are small and medium-sized enterprises left out? How the subsidy system of DAX-listed companies is endangering our economy

VW, E.ON & Co.: These DAX companies collect the most German taxpayers' money

In recent years, the allocation of state subsidies to Germany's largest listed companies has transformed from a footnote into a highly sensitive political issue. While DAX-listed corporations regularly distribute record profits in the hundreds of billions, gigantic sums of taxpayers' money simultaneously flow into their balance sheets – officially declared as essential aid for crisis management, securing Germany's economic competitiveness, or climate transformation. But how much of this so-called industrial policy is actually economically necessary, and at what point does a hidden redistribution of wealth from the bottom to the top begin? Critical voices from civil society and economic research, including NGOs like Correctiv and LobbyControl, have long warned of an immense number of unreported cases. They point to an opaque network of direct subsidies, indirect tax breaks, and enormous lobbying influence that distorts competition. This analysis sheds light on the raw numbers behind the payment flows, uncovers the mechanisms of government subsidies, and poses the pressing question: Doesn't the current system primarily benefit those who are already powerful – at the expense of small and medium-sized enterprises, innovation, and social solidarity?

A subsidy system without clear limits: An economy caught between industrial policy, pressure for returns, and growing political explosiveness

State subsidies for DAX-listed companies have transformed in less than a decade from a fringe issue to a central point of contention in economic and distributional policy. While these large, publicly traded companies are raking in record profits, billions of euros from public coffers are simultaneously flowing into these very corporations – officially for securing their locations, facilitating transformation, and managing crises. This situation fuels mistrust: Is it sound industrial policy or a covert redistribution of wealth from the bottom to the top? NGOs and critical observers have been speaking for years of significant unreported figures and opaque structures.

The debate centers on two levels: the aggregated figures, which reveal an enormous volume of payments, and the question of how fair, efficient, and democratically controlled this system is. Added to this are different methodological approaches: think tanks, media investigations, and NGOs like Correctiv or LobbyControl view subsidies not only as direct grants but also warn of difficult-to-measure indirect benefits and political influence that can be detrimental to the common good.

Against this backdrop, a sound analysis cannot be reduced to a mere calculation of totals. Crucially, it is important to consider what types of benefits are granted, which sectors particularly profit, what reciprocal obligations and controls exist – and what long-term economic and political effects this subsidy regime has.

What subsidies actually mean economically for DAX companies

To bring order to the debate, it is first necessary to clarify what is actually meant by subsidies in the relevant analyses. In the broader public discussion, very different instruments are often conflated – from direct grants and tax breaks to government guarantees, which have value even if they are not used.

Economically, four core categories can be distinguished, which also play a role in the current analyses of DAX companies:

• Direct grants: Payments from the federal budget or special funds to companies, for example for investments, research, location projects or crisis aid.
• Tax benefits: Special depreciation allowances, tax exemptions or reductions that lower the tax burden compared to a "neutral" reference system.
• Guarantees, sureties and equity investments: Government risk assumptions that reduce financing costs or even make access to capital possible in the first place.
• Indirect subsidies: Funding programs that formally support households or other actors, but in fact favor specific industries and large companies, such as environmental bonuses for car purchases.

The analysis by the Flossbach von Storch Research Institute, frequently cited by the media, focuses primarily on government subsidies reported in annual financial statements, thus concentrating mainly on direct support. The authors themselves emphasize that their figure is a "conservative" estimate, as companies have leeway in whether and how they report contributions as subsidies. NGOs such as Correctiv and LobbyControl generally go significantly further, also considering tax and regulatory benefits that do not necessarily appear in traditional subsidy statistics.

This creates a central area of ​​tension: What may only reflect a part of state funding from the perspective of official statistics appears from the perspective of critical civil society to be the tip of a larger, structural subsidy complex that also includes tax policy and regulatory privileges.

The bare figures: Billions flowing to DAX companies

Recent quantitative analyses paint a clear picture: Subsidies for DAX-listed companies have increased dramatically in just a few years. According to an analysis by the Flossbach von Storch Research Institute, a total of approximately €35 billion in government funds flowed to the 40 DAX companies between 2016 and 2023. Until 2018, the annual amounts were around €2 billion; since then, they have risen significantly.

In 2023 alone, DAX-listed companies received at least €10.7 billion – almost double the €6 billion received the previous year. It's important to note that these figures do not represent all corporate subsidies in Germany, but only pertain to the largest stock market index. At the same time, these companies reported net profits of around €117 billion in 2023, a level at which the state's role no longer appears as mere emergency aid, but as an ongoing, significant factor in their business models.

The study also shows that eleven of the 40 DAX companies each received more than one billion euros in subsidies between 2016 and 2023. The median amount of subsidies received per DAX company is approximately 200 million euros. A detailed analysis by financial media based on the study identifies E.ON as the largest recipient with more than 9.3 billion euros, followed by Volkswagen with 6.4 billion euros and RWE with another billion-euro sum.

This means that a significant portion of the payments is concentrated on energy and mobility-related corporations, which aligns with the political priorities of climate transformation, energy transition and industrial policy, but at the same time raises sensitive distribution issues.

Federal aid in the narrower sense: a look at budget allocations

In addition to the widely cited comprehensive analyses, a closer look at the official figures published by the German Federal Government in response to parliamentary inquiries is worthwhile. For example, in an answer to a minor inquiry, the Federal Government's direct subsidies to DAX-listed companies for the year 2025 were estimated at approximately €835.2 million.

The largest recipients in this more narrowly defined category were Infineon with approximately €358.5 million and RWE with nearly €170 million. These grants were significantly higher than in 2024, when the DAX-listed companies together received almost €690 million in federal funds. For 2026, €883.6 million in committed funds are already reported, indicating a further increase.

These figures refer to direct federal subsidies and do not include state funds, EU funding, or tax breaks. At the same time, the data clearly shows that the government is channeling substantial sums not only into traditional sectors like energy and basic materials, but also into future-oriented fields such as semiconductors.

It is also interesting to look at other indices: MDAX companies received a total of €138.4 million in federal subsidies in 2025, with Thyssenkrupp being the largest recipient (around €95.3 million). In the SDAX, federal funding totaled around €295 million in the same year, with Salzgitter AG receiving the lion's share at €262.8 million. This illustrates that medium-sized and smaller listed companies also receive substantial sums if they operate in strategically important sectors.

Direct and indirect beneficiaries: Who is at the top of the subsidy pyramid?

The well-known rankings of the largest subsidy recipients among DAX-listed companies show a clear pattern favoring energy-intensive and systemically important industries. E.ON leads the list with more than €9.3 billion, followed by Volkswagen with €6.4 billion, and RWE is also among the largest recipients.

This concentration can be explained by several factors:

• Energy suppliers and infrastructure companies are key players in the energy transition, which the state is politically promoting and financially supporting.
• Automotive companies are undergoing a profound transformation towards electromobility and new drive technologies, which is being massively promoted by the government – ​​partly directly, partly through consumer subsidies.
• Individual corporations act as "champions" in strategic projects, such as semiconductors or major investments, and receive correspondingly high-volume funding packages.

In addition, there are indirect subsidies, which, while not directly recorded as payments to companies, effectively support their business models. A prominent example is the environmental bonus for the purchase of electric cars, which formally benefits private households but de facto stimulates demand for certain products in the automotive industry. The subsidies reported in annual financial statements do not capture such mechanisms, making the overall picture appear considerably more generous from the perspective of NGOs.

In some cases, the subsidies received exceed 10 percent of the cumulative pre-tax profit, reinforcing the impression that state funds have not just marginal, but structural significance for the profitability of individual corporations. This magnitude is a key trigger for criticism from civil society actors, who see it as an unhealthy dependency between politics and large corporations.

The perspective of Correctiv and LobbyControl: Unreported cases and power asymmetries

While the Flossbach von Storch Research Institute views subsidy figures from a primarily financial economic perspective, organizations like Correctiv and LobbyControl focus more on transparency, power structures, and democratic oversight. Both organizations have repeatedly pointed out in recent years that officially reported subsidies only reflect a portion of the government benefits enjoyed by large corporations.

NGOs criticize three points in particular:

• Lack of transparency and fragmentation: Subsidies are distributed across federal, state and EU levels, across various ministries and funding pools, making it difficult to obtain an overall overview.
• Tax policy privileges: Tax breaks are often not perceived as subsidies, even though they have economically comparable effects to direct grants.
• Political influence: Large corporations have above-average resources to lobby and influence funding conditions, while democratic control and public debate lag behind.

Correctiv has repeatedly highlighted the structural problem in its various investigations that large corporations benefit significantly from public funds, while their lobbying influence on political decisions is difficult to discern. LobbyControl, in turn, regularly documents the lobbying power of corporations and associations in its studies – for example, in EU regulation, party financing, or in educational contexts – and shows how economic interests systematically organize access to politics.

For example, LobbyControl has pointed out that numerous DAX companies provide teaching materials for schools, thereby introducing interpretive frameworks and image into educational contexts at an early stage. While this isn't considered a subsidy, it is part of a broader ecosystem of influence. Furthermore, the organization analyzed party donations and found that not all DAX companies typically appear as major donors, but that the interplay between lobbying, project funding, and informal influence is far more complex.

From an NGO perspective, the truly explosive "hidden figure" is therefore less a precisely identifiable sum, but rather the elusive network of direct subsidies, tax advantages, regulatory exemptions and lobbying influence that, in total, creates privileged access to state resources for large corporations.

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Industrial policy or corporate patronage? The economic logic behind subsidies

Defenders of the subsidy practice argue primarily from an industrial policy perspective. They point out that in times of multiple crises – from the COVID-19 pandemic to the war in Ukraine – the state had to, and still has to, stabilize companies and secure jobs. Furthermore, they argue that the subsidies are intended to initiate transformation projects in the areas of climate, energy, and digitalization, which would hardly be feasible at the necessary speed and scale without state support.

Several lines of reasoning are central here:

– External effects: Investments in climate protection, infrastructure, or research generate positive effects that cannot be fully recouped through private means, which is why government co-financing can be efficient.
– Location competition: In an international environment where other countries also provide targeted support to companies, foregoing subsidies leads to the relocation of key industries.
– Systemic relevance: Critical infrastructures such as energy supply or semiconductor production are of such importance that the government must actively finance a resilient structure in these areas.

Conversely, the criticism is that subsidizing profitable large corporations creates perverse incentives and distorts competition. If companies can expect government funding regardless of their profitability, the pressure to adapt inefficient structures or to bear risks independently decreases. Furthermore, there is a risk that small and medium-sized enterprises (SMEs), which have less access to funding programs and lobbying channels, will be disadvantaged in the competition.

The situation becomes particularly economically problematic when subsidies are not clearly tied to additional investments and measurable progress in transformation, but instead primarily function as location premiums or return buffers. The data available so far suggests that both are happening simultaneously: there are undoubtedly state-cofinanced transformation projects, but at the same time, there are also high payouts to shareholders, while significant amounts of public funds are flowing in.

Hidden distortions: Competition, SMEs and innovation dynamics

A key, often underestimated problem with extensive subsidies for large corporations is the secondary effect on market structure and innovation. When DAX-listed companies – equipped with economies of scale, market power, and government co-financing – invest in future-oriented fields, smaller competitors quickly find themselves relegated to the role of suppliers or are completely squeezed out.

Possible consequences of this situation are:

• Concentration of innovative power in a few large companies, which increases the risk of path dependencies and technological monocultures.
• Market entry is made more difficult for start-ups that are innovative but unable to benefit from government programs to the same extent.
• A political and media fixation on "flagship projects", while more decentralized, small-scale innovations remain under the radar.

NGOs, in particular, point out that subsidy policies rarely have a neutral effect in practice. Large corporations have specialized teams to review funding programs, submit applications, and tailor projects precisely to specific tenders. Small and medium-sized enterprises (SMEs) often lack this infrastructure, even though they form the backbone of employment and innovation in many economies.

Thus, well-intentioned support for transformation and location-based expertise can unintentionally become structural support for existing large players – and thereby weaken competitive dynamics in the long term. Economically, this is ambivalent: In the short term, it secures jobs and investments, but in the long term, it risks new, potentially more efficient or sustainable business models facing less favorable conditions.

Political economy of the subsidy landscape: Lobbying, narratives and legitimacy conflicts

The raw figures only explain part of the reality of subsidies. Equally important is how these payments are politically legitimized, framed in the public discourse, and implemented. Organizations like LobbyControl have been analyzing for years how corporations and associations position narratives that link their interests to overarching public welfare goals – such as climate protection, security of supply, or digitalization.

Several patterns are characteristic:

• Crisis rhetoric: In acute crises, aid is initially communicated as emergency measures, which later transition into permanent subsidy structures.
• Location argument: Large investments are presented as an "opportunity for the location," while implicit threats of relocation are made if public funds are not forthcoming.
• Employment promises: Subsidies are justified by the securing or creation of jobs, even though the actual employment effects are often unclear or difficult to verify.

Correctiv and other investigative media outlets have repeatedly shown that the same corporation tells different stories to politicians, the public, and the capital market – depending on whether the issue is securing subsidies, improving its image, or meeting return expectations. While the need for public support is emphasized in political circles, profitability and dividend payout capacity are highlighted to investors.

This divergence of narratives poses a key challenge to democratic oversight. When subsidies amounting to billions are decided upon without clear, transparent, and publicly verifiable criteria and evaluation mechanisms in place, the line between legitimate industrial policy and problematic corporate patronage becomes blurred.

Macroeconomic dimension: Subsidies, budgetary leeway and distributional conflicts

At the macro level, the question arises as to what alternative uses these billions could have and how they are embedded in the overall architecture of public finances. Subsidies to DAX-listed companies are in direct competition with investments in infrastructure, education, social security systems, and relief for households and small businesses.

Against the backdrop of limited fiscal leeway and a more restrictive debt policy, these alternative costs are gaining in importance. Every euro that flows to a profitable corporation as a location premium or investment subsidy cannot simultaneously be invested in public services or broader relief programs.

Furthermore, subsidies for large companies reinforce the perception of unequal treatment: While the general population may be affected by austerity programs, tax increases or benefit reductions, the impression remains that the largest corporations have special channels and special funds.

NGOs therefore warn of a gradual erosion of political legitimacy. When citizens feel that "there's always money for the big players" while public services are cut, fertile ground is created for populist narratives. Subsidy policies for DAX-listed companies are thus not only an economic risk, but potentially also a risk to democracy.

Transformation goals versus distributive justice: A necessary readjustment

In light of the climate crisis, the energy transition, and technological disruption, the question is not whether the state should pursue industrial policy, but how. Current figures and structures suggest that simply reducing it to "more or fewer subsidies" falls short. The crucial questions are what conditions are attached to public funds and how broadly the benefits of the transformation are distributed.

An economically sound and politically viable readjustment would have to take several aspects into account:

– Strict conditionality: Subsidies should be clearly tied to verifiable objectives – such as CO₂ reduction, innovation performance, job quality, or regional development.
– Transparent reporting: Companies should be required to fully and systematically disclose government support, including indirect aid, to the extent quantifiable.
– Sharing in crisis costs: If corporations receive government support during crises, they must, in return, contribute more to financing the public sector in prosperous years, for example, through progressive taxation or repayment mechanisms.
– Stronger focus on SMEs: Support programs should be explicitly designed to ensure that small and medium-sized enterprises (SMEs) also have realistic access opportunities.

NGOs like Correctiv and LobbyControl provide important impetus here by highlighting transparency gaps and exposing power asymmetries. Their criticism is directed less against all forms of state support, but rather against a funding architecture that is structurally skewed in favor of the largest and most influential actors.

The verdict of a sober economist: Subsidies yes – but different, smaller, more transparent

From a purely economic perspective, it can be stated that government support for companies is efficient and necessary in certain situations – for example, for transformation investments with significant positive externalities, in acute crises, or for building strategic capacities. The problem with the German subsidy regime for DAX-listed companies lies less in the existence of subsidies than in their scope, structure, and insufficient transparency.

Available data shows that subsidies to large corporations have accumulated to tens of billions of euros within just a few years, while these companies remain highly profitable. At the same time, the criteria by which these funds are granted, extended, or expanded are only partially transparent to the public. NGOs convincingly point out that the officially reported amounts only incompletely reflect the actual benefits to the state.

A rational reform would therefore focus on three points: limiting the scope, focusing on the impact, and maximizing transparency. Specifically, this means fewer blanket location subsidies, a stronger link to measurable transformation goals, and mandatory, company-specific disclosure of all relevant government benefits.

Under these conditions, subsidies can be a legitimate instrument of modern industrial policy without degenerating into a disguised means of securing returns for already powerful players. Without such reforms, however, existing structures will continue to fuel the narrative of a system in which economic power and political influence reinforce each other – at the expense of competition, fiscal sustainability, and democratic acceptance.