After the Karlsruhe budget verdict, the government wants to examine its energy transition plans. However, the schedule for the 2024 budget is not in question. Calls for an end to the debt brake are becoming louder.
Following the Federal Constitutional Court’s ruling on the Climate and Transformation Fund (KTF), the traffic light coalition is reviewing energy transition projects. “60 billion euros in inflows from 2021 are no longer available,” said Chancellor Olaf Scholz.
The fund’s economic plan will therefore be revised quickly in view of the judgment and provisional regulations will be made so that funds that have not yet been determined are not spent unnecessarily. The judgment should be carefully evaluated and “closely observed”. The SPD politician went on to say that it might also have an impact on the budgets of the federal states.
Current hour in the Bundestag
The verdict will also concern the Bundestag in the short term. At the request of the CDU/CSU parliamentary group, there will be a current hour in parliament on Thursday afternoon.
The Federal Constitutional Court had declared a reallocation of 60 billion euros in the 2021 budget to be unconstitutional and void. The federal government is not allowed to use funds intended to combat the Corona crisis for climate protection. This could have a major impact on the so-called climate and transformation fund, from which the federal government wanted to pay for numerous funding programs – including for the replacement of old oil and gas heating systems.
Budget procedures should remain
However, the parliamentary procedure for the 2024 budget should not be affected. “The German Bundestag will continue its discussions on the 2024 budget as planned,” said Scholz.
Lindner announces new one Economic plan at
Federal Finance Minister Christian Lindner said that as a first consequence he had “blocked the KTF’s economic plan”. This applies to the years 2024 and 2025. However, measures to promote energy efficiency and the heat transition in the building sector are excluded. A new economic plan should now be drawn up as quickly as possible.
Economics Minister Robert Habeck pointed out that the payments from the KTF affect many areas, from building renovations to the promotion of e-mobility to geothermal energy or decisions on housing construction. Despite the ruling, “all promised commitments will be kept” – but new ones will only be possible once the new financial plan has been drawn up, said the Green politician.
Söder sees the end of the coalition coming
CSU boss Markus Söder sees the end of the traffic light’s reign. The Bavarian Prime Minister said it was a bad day for the ability to govern in Germany and a disaster for the coalition of the SPD, Greens and FDP: “And actually this means that any legitimacy to continue to govern is over. Basically, a government cannot do that keep going.” Lindner is primarily to blame: “A Federal Finance Minister who presents an unconstitutional budget no longer has any confidence in being able to carry out this task effectively.”
“Budget policy the traffic light is based on Constitutional violationeat”
The CDU budget expert Mathias Middelberg, one of the plaintiffs, spoke of a catastrophe for the government. “The traffic light’s entire budget policy is based on constitutional violations.” In the government survey in the Bundestag, he pointed out the historical dimension of the judgment. For the first time, the Federal Constitutional Court declared a federal budget unconstitutional and also void. “This has never happened in the history of this republic,” said Middelberg.
Reactions from business and associations
According to Ifo President Clemens Fuest, the ruling has far-reaching consequences: “There will be significant restrictions on federal budgets in the coming years when it comes to spending on government support for decarbonization,” he told the Reuters news agency. One option is to declare an emergency situation again in 2023 or 2024, not to comply with the debt brake requirements for normal times and to increase new debt. “After this ruling, it is questionable whether that would be compatible with the Basic Law,” said Fuest.
DIW President Marcel Fratzscher sees the ruling as an impetus for reforming the debt brake. “The attempts by federal governments over the past twelve years to circumvent the debt brake have become increasingly absurd,” said Fratzscher. It is “no longer up to date because it deprives politicians of the scope they need to combat crises and make investments for the future.”
New taxes demanded
Climate and social associations are calling for new taxes and loans to invest in a social energy transition in Germany. Greenpeace Germany explained that Scholz must use his policymaking authority to financially support citizens on the path to climate neutrality. “Loans, new taxes and the reduction of climate-damaging subsidies must not be taboos.”
German Environmental Aid demanded that all cost-saving measures be implemented immediately and cited a speed limit and changed company car taxation. The German Nature Conservation Association said: “The verdict pulls the rug out from under the current climate protection financing.”
DGB and Paritätischer: Suspend the debt brake
The German Federation of Trade Unions (DGB) called for the debt brake to be suspended. “The bang from Karlsruhe means one thing above all: the federal government must suspend the debt brake again, because the consequences of the energy crisis are far from over,” said board member Stefan Körzell. The traffic light must ensure that the necessary investments in climate protection and transformation come. Urgent support for energy-intensive industries and social climate money should also not be questioned.
The general manager of the Joint Association, Ulrich Schneider, also called for the debt brake to be suspended. He criticized the taboo nature of tax increases.