SPD leader Esken has again advocated suspending the debt brake for two years. This would create more scope for government spending. There will be no savings made in either climate change or the welfare state.
After the Federal Constitutional Court’s budget ruling, SPD party leader Saskia Esken once again called for the debt brake not to be applied for this year and next year due to an emergency. “Since we find ourselves in a continuing crisis situation due to external influences, I continue to advocate suspending the debt brake for 2023 and 2024,” Esken told the newspapers of the Funke media group. A suspension would temporarily create more scope for government spending, which was restricted by the Karlsruhe ruling with regard to so-called shadow budgets of the past.
On Wednesday, the Federal Constitutional Court declared a reallocation of loans worth 60 billion euros in the 2021 budget to be null and void. They were approved to deal with the Corona crisis, but should be used for climate protection and the modernization of the economy. It is unclear whether the ruling could have additional consequences for the handling of debt-financed special funds at the federal and state levels.
Debt brake reform “inevitable”
Esken emphasized that at the same time the challenges of climate change, digitalization and demographic change would make a general reform of the debt brake “inevitable”. “It is clear that we will not allow any savings in climate protection and its socially just design or in the welfare state,” said the SPD leader, who wants to run for another two years at the head of the Social Democrats together with Lars Klingbeil at the party conference in December. She also renewed the SPD’s demand to ensure additional income through higher taxes for top earners.
“No Crisis management at the expense of social infrastructure”
At the end of October, Esken had already called for the debt brake to be suspended again in view of the possible financial effects of the current conflicts in the world. “The ongoing crises, not least due to Russia’s attack on Ukraine and the conflict in the Middle East, are creating challenges that we cannot meet from a normal budget without neglecting other tasks,” Esken told the “Rheinische Post” . Crisis management at the expense of social infrastructure, democracy promotion or integration – that cannot be done with the SPD.