Budget judgment
Economist: Suspending the debt brake requires emergency
The 2024 budget draft in paper form. photo
© Kay Nietfeld/dpa
The calls for the debt brake to be suspended are becoming louder. But it is not that easy. The economist Veronika Grimm points out the difficulties.
The economist Veronika Grimm has called for the debt brake to be suspended after the Federal Constitutional Court’s budget ruling criticized. “Suspending the debt brake by means of an emergency rule requires an emergency. It is difficult to argue,” said “Wirtschaftsweise” to the newspapers of the Funke media group. SPD leader Saskia Esken had previously called for the debt brake to be suspended for 2023 and 2024 and argued that there was a “continuing crisis situation”.
The Federal Constitutional Court judged the use of Corona loans for climate projects to be unconstitutional on Wednesday. The ruling tears a 60 billion euro hole in the financing of climate projects.
Grimm said the Karlsruhe ruling meant “a drastic change and hopefully a turning point.” A first step must be to readjust climate policy. The key instrument must be emissions trading. This would create clear incentives for households and companies to pursue climate protection, “at no cost to the state.” Climate protection is “a long-term transformation task that will last decades. Here you have to act sustainably in terms of financial policy, otherwise we will experience sovereign debt crises in Europe long before the climate is saved,” said Grimm.
The economics professor called on the traffic light government to cut state aid. Too many subsidies were provided. “Households that can afford it do not need to be subsidized to replace their heating system.” Energy-intensive companies should be supported in tackling the transformation to climate neutrality. “But we shouldn’t have to stop structural change with relief measures.”