BioWorld International Correspondent

MUNICH, Germany - German Chancellor Gerhard Schroeder formally laid out his government's plans for its second term in a speech last week to the Bundestag, the country's parliament, which stressed the need for savings in difficult economic times. While the speech did not mention biotechnology specifically, the re-elected government's plans have two significant elements for the sector.

First, government support for start-up and smaller biotechnology firms will continue to taper off over the next four years. Over the last seven years, government programs such as the BioRegio competition and BioChance grants have given a significant boost to biotechnology in Germany. (See BioWorld International, July 3, 2002, and June 19, 2002.)

With the government under increasing pressure to cut funding, companies will have to rely on private sources of capital and build their own sales income quickly. Exact figures will be a part of the budget negotiations worked out early next year.

Second, agricultural biotechnology now will be supervised by the Ministry for Consumer Protection, Food and Agriculture. That completes a change begun in the last term, when numerous scandals in food production forced the government to take a strong hand in overseeing how food moves from the field to the table. The ministry is led by Renate Kuenast, a firebrand from the Green party, the junior party in the ruling coalition, who has placed consumer protection at the top of her agenda.

Under her leadership, Germany will continue to press for labeling requirements for GMOs used in food. According to a spokesperson for the ministry, they will work to see that the thresholds for labeling are set "as low as possible" when European regulations are issued in Brussels. The spokesperson also said that medical biotechnology, except for possibly a few small areas such as plant production of medicines, is not likely to come under the supervision of the Consumer Protection Ministry.

Schroeder also announced that no less than 20,000 rules would be dropped from the Finance Ministry's rulebooks. He promised help for entrepreneurs and to ease the burden of regulation involved in starting a new company. Germany is regarded is one of the more difficult countries in Europe in which to start a business. The process of founding a company often takes upward of 60 days, compared with approximately 10 days in Britain. Founding times indicate the general level of corporate regulations that companies must observe and are often cited by industry groups and chambers of commerce as a competitive disadvantage for Germany. The regulatory burden for small companies, such as a biotech start-up, lessened during the coalition's first term, but the removal of regulations is in itself a slow and often bureaucratic process.

These items meet some, but not all, of the elements set out by the German Association of Biotechnology Industries, known by its German acronym of DIB, in an appeal before the election. Jens Katzek, managing director of the DIB, told BioWorld International that "our reaction to the new government is just as ambivalent as the government's attitude toward biotechnology. On the one hand, they say that biotechnology is a key industry for the future. On the other, many of their regulations hinder the marketing of actual products."

The most likely point of contention between the industry and the government will fall in agricultural biotechnology. The DIB appeal said that consumer preferences should not be used to disparage genetic technology or to make its application of genetic technology de facto impossible. Given current consumer fears about GMOs, Kuenast's approach to labeling will keep GMO products from reaching German retail shelves in any significant amount. "The restrictions on green biotechnology are so strict that they will make it almost impossible to develop in Germany," Katzek said.

He added that it was too soon to tell about many of the individual items in the DIB's program, because the coalition agreement did not spell out the government's plans. One thing, however, is crystal clear, Katzek said.

"We are in a historic situation. For the first time ever, all five of Germany's most prominent economists have agreed that the country is in a catastrophic position. Our suggestion is that every potential regulation be examined first and foremost on the basis of whether or not it will help to bring growth to the country's economy. For too long, this criterion has been subordinate to questions of consumer worries or prevention or other items. Now we have to focus on the question of whether things bring new growth."

Katzek said he is optimistic that the new government will share the DIB's priorities. One indicator he cited is the appointment of Wolfgang Clement as a minister for jobs and the economy. Clement had previously been governor of Germany's largest state and is known as a political powerhouse. Katzek said that suggests that the government will measure its policies, including its biotechnology policies, on how they contribute to economic growth.