Abstract :
Beginning with the coal crisis of 1958, the survival of the German hard coal mining sector has been heavily dependent on subsidies for several decades. These subsidies are a complex system of almost 60 different measures often with conflicting objectives. Annual financial support for this subsidy system grew from €0.6 billion in 1958 to €7.5 billion in 1989 with the majority of the funding financed outside the public budget by a special fund based on the “coal penny” (Kohlepfennig). In 1995, the abolishment of the “coal penny”, in connection with budget constraints, led to a significant subsidy decrease to €3.5 billion. A recent agreement between the Federal government and the mining state of North-Rhine Westphalia in 2003, however, seems to have fixed German hard coal subsidies at the €2 billion level for the time after 2012.
