analysis
Federal Finance Minister Lindner is questioning the coal phase-out in 2030 and is attacking the Greens. They had previously shown themselves open to suspending the debt brake again. What’s behind the exchange of blows?
For months, the traffic light coalition has been debating how electricity prices in Germany can be reduced. So far, the dispute has mainly revolved around the question of whether a state-subsidized industrial electricity price, a reduction in electricity tax or perhaps both is the right answer. It is no coincidence that Federal Finance Minister Christian Lindner is now bringing up the coal phase-out brought forward to 2030.
On Monday, SPD chairwoman Saskia Esken once again questioned the debt brake. She justified this with the ongoing crises, not least triggered by the ongoing war in Ukraine and the situation in the Middle East. According to Esken, the resulting challenges for Germany cannot be met from the normal budget without neglecting other tasks.
She received support from Green Party leader Ricarda Lang on the same day. She also criticized the lack of financial leeway in the current budget negotiations, which is why the government would have to discuss the debt brake again.
Both Esken and Lang were clear: the debt brake is a sacred cow for the Liberals. The objection from the FDP parliamentary group leader therefore followed as quickly as expected. Christan Dürr tried to fend off the move with a financial policy argument and attributed the fall in the inflation rate in October to an expected 3.8 percent to the federal government’s budget discipline. There can actually be no question of this, at least with regard to the current budget.
Lindner’s austerity measures have many opponents
According to the Federal Statistical Office, the federal government spent 64.2 billion euros more than it received in the first half of this year. In the same period last year it was significantly less at 45.2 billion euros. In addition, the federal government’s debt will increase by three percent or 49.2 billion euros in the second quarter of 2023 compared to the end of 2022.
The Federal Finance Minister would like to reverse the trend in the next budget and comply with the debt brake again after it was suspended for three years in a row. But as always, the Bundestag has the final say and there are numerous desires there to deviate from Lindner’s austerity policy.
In addition to Lang, Economics Minister Robert Habeck had also critically questioned the debt brake. In view of the changed framework conditions, the rules of the game in financial policy must also be reviewed, demanded the Green politician when presenting his industrial strategy last week.
But unlike his party leader, the Vice Chancellor and Economics Minister probably meant a medium-term reform rather than another suspension next year. Finally, he also added that the coalition agreement and thus also the debt brake apply to this legislation.
Lindner: Electricity prices must not continue to rise
The increasingly violent shaking of the debt brake by leading Green politicians is probably the reason why Lindner is now questioning something whose consequences can only be predicted today. An analysis by Energy Brainpool even comes to the conclusion that the phase-out of coal has no impact at all on electricity prices. The energy market experts thus contradict the finance minister’s assumption that the coal phase-out would lead to an artificial shortage of electricity supply and thus to rising prices.
But what the debt brake is for the Liberals is the coal phase-out for the Greens – especially after the painful compromises for the Green clientele as a result of Russia’s war of aggression on Ukraine. The nuclear power plant operation and the ramp-up of the coal-fired power plants led to strong criticism from the Green Party base. Bringing forward the coal phase-out to 2030, at least in the West, was able to smooth some things out again. It would hardly be possible to move away from this again.
Liberals will not sacrifice the debt brake
The same applies to Lindner and his base. The letter from some state and local politicians probably didn’t leave much of an impression on the party leader. But after recent poor election results, even Lindner is by no means unchallenged. The heated debates at the last federal party conference of the Liberals on the heating law also highlighted the tense relationship with the traffic lights and especially with the green coalition partner.
With his push to phase out coal, Lindner is probably aiming for applause from his own ranks. But the core message is aimed at the Greens: If you want to get my holy cow, you first have to sacrifice yours.