Federal Government
According to the budget verdict: Scholz wants to reassure the population
Chancellor Olaf Scholz (SPD) wants to revise the budget carefully. photo
© Michael Kappeler/dpa
Chancellor Olaf Scholz promises quick decisions about the financial approach. Help such as curbing high energy prices is still possible. However, his finance minister announces negative news.
However, Federal Finance Minister Christian Lindner announced that the state caps on gas and electricity prices will expire at the end of the year.
The economic stabilization fund will be closed on December 31st, said the FDP chairman on Deutschlandfunk. “So there will be no more payments from this next year. Electricity and gas price caps are expiring. These will also have to be ended on December 31st.” It was only one day after the verdict that the Bundestag decided to extend the brake regulation until March 31st. In the midst of the budget crisis, Lindner also decided to put his budget state secretary, Werner Gatzer, into temporary retirement at the end of the year. According to the announcement, his successor will be Wolf Reuter, head of the policy department in the finance department.
Gatzer is considered the architect of budgets for many years and was already in the department under Finance Ministers Wolfgang Schäuble (CDU) and Scholz. The Ministry of Finance said about his successor: “Financial policy is facing major challenges that must be addressed in terms of both fiscal and economic policy.” Reuter has the best prerequisites for this.
Scholz: Revise the budget with care
Chancellor Scholz said in his video message: “The Constitutional Court has stated that assistance in such special emergencies is still possible.” That is the most important message. He also mentioned aid to protect jobs and companies, such as was granted during the corona pandemic. “We will revise the budget for next year in detail in the light of the judgment. Quickly but with due care,” emphasized Scholz. He referred to his government statement in the German Bundestag planned for Tuesday and said that necessary decisions should not be put off for a long time.
The federal government is guided by clear goals and continues to pursue them. “Firstly, we want to mitigate the consequences of the Russian war of aggression against Ukraine and its impact on our country,” said Scholz. In second and third place he named support for Ukraine and strengthening cohesion in Germany. “Fourthly, we want to continue to modernize our country so that we continue to have a strong industry, good jobs and good wages in the future if we operate in a climate-neutral manner.” And fifthly, the federal government wants Germany to become faster and more digital.
The Federal Constitutional Court’s budget ruling concerns money that was approved as a Corona loan, but was subsequently intended to be used for climate protection and the modernization of the economy. It is an amount of 60 billion euros. The judges declared this approach unconstitutional. At the same time, they decided that the state should not reserve emergency loans for later years. Therefore, billions more for future projects are at risk.
Demand for an exemption from the debt brake
It is questionable how this financial hole will be filled. The traffic light wants to use the exemption from the debt brake this year. There are calls from the SPD and the Greens to take this step again next year and to reform the debt brake as a whole. The effects of the “many crises piling up” will also be felt in the coming year, said SPD chairwoman Saskia Esken of the German Press Agency. “It is therefore obvious that we must decide on an exemption from the debt brake early on for 2024 as well.”
However, reform is not currently on the federal government’s agenda, as government spokesman Steffen Hebestreit made clear on Friday. “At this point in time, that is not on the cards.” It’s now about drawing up the 2024 budget.
The Chancellor has already pointed out on several occasions that a two-thirds majority in the Bundestag is needed to reform the debt brake, his spokesman explained. “And the factions supporting the government have stated in their coalition negotiations that there is no majority for change and to this extent this is not the federal government’s plan at the moment.”
In order to reform the debt brake, the Basic Law would have to be changed. This requires a two-thirds majority in the Bundestag and Bundesrat.
There is definitely sympathy for such a reform at the state level. The CDU Prime Ministers of Saxony-Anhalt and Saxony, Reiner Haseloff and Michael Kretschmer, are open to this. “The debt brake must remain,” Haseloff told “Stern”. “But for very important future investments in business, technology and science, constitutionally compliant ways must be found to realize them.”
Kretschmer told the “Frankfurter Allgemeine Sonntagszeitung” that if the federal government was ready for real austerity measures, the Union would support it. At the end of a joint process there could be a pact for Germany – “and perhaps a discussion about changing the debt brake.” Such austerity measures must include no further increase in social spending.
The SPD Prime Ministers Stephan Weil (Lower Saxony), Malu Dreyer (Rhineland-Palatinate) and Anke Rehlinger (Saarland) are also not averse to reform. The question arises as to whether the debt brake would inhibit investments in the future, said Dreyer in Berlin. “The debt brake must not be a brake on the future or on investments,” emphasized Rehlinger.