Finance
Habeck: Energy price brake is wobbling
“If we get into a crisis, we will no longer be able to apply the brakes on gas and electricity prices”: Robert Habeck. photo
© Annette Riedl/dpa
After the Karlsruhe budget verdict, the government is missing billions for climate protection. Things may get even worse: electricity, gas and district heating could become more expensive, warns the Minister of Economic Affairs.
The Federal Audit Office considers the federal budgets for this year and next to be “extremely problematic from a constitutional point of view.” This emerges from the statement of the authority for the expert hearing in the Budget Committee of the Bundestag. Deciding on the budget for 2024 in the current situation is risky.
The Green politician Habeck said that in his opinion the verdict also endangers the Economic Stabilization Fund (WSF), from which the energy price brakes are paid. “In its justification, the judgment, because it is so fundamentally spoken, actually refers to all funds that have been set up and that are over the year,” said the Green politician on Deutschlandfunk.
This would also affect funds that have already been paid out this year. By the end of October, 31.2 billion euros had already flowed from the WSF. Specifically: 11.1 billion euros for the gas price brake and 11.6 billion for the electricity price brake, plus 4.8 billion for emergency natural gas aid and 3.7 billion euros in subsidies for network fees.
200 billion euros
The energy price brakes were intended to mitigate the rapid rise in gas and electricity prices following the Russian attack on Ukraine. Aid was also planned for particularly affected companies. To this end, the special fund, which is economically independent of the core budget, was provided with loans amounting to 200 billion euros. Whether the funds will still be available next year is just as doubtful as whether the money should have been paid this year at all.
Most of the experts appointed by the parliamentary groups believe that impacts on the special fund for energy price brakes are conceivable. However, they do not comment clearly on the consequences in their statements. Habeck, on the other hand, warned on Deutschlandfunk: “If we get into a crisis, we will no longer be able to apply the brakes on gas and electricity prices. Then we will have higher gas and electricity prices and district heating prices.”
Different opinions from the experts
The experts are to be questioned in detail about their opinions in the Budget Committee on Tuesday. They have different opinions on the 2024 budget. In his statement, tax lawyer Hanno Kube from the University of Heidelberg advises against a decision in the 2024 budget. “The current draft of the 2024 budget law could be unconstitutional,” he writes. It is unclear whether individual items from the climate and transformation fund would now have to be transferred to the core budget.
Economist Jens Südekum, on the other hand, does not see next year’s core budget being directly affected by the Karlsruhe ruling. As long as a spending freeze is imposed in the climate and transformation fund, the budget can be passed. However, a supplementary budget is likely soon. Because open questions about the judgment cannot realistically be resolved by the end of the year, the budget should still be decided first, he advises.
60 billion euros are no longer available
The opposition Union had sued in Karlsruhe against the reallocation of loans worth 60 billion euros in the federal budget. They were approved to deal with the Corona crisis, but were then supposed to be used for climate protection and the modernization of the economy. The Constitutional Court declared the traffic light government’s maneuver null and void: the money is now no longer available. The ruling could not only have consequences for the federal government’s handling of debt-financed special funds, but also for the budgets of the federal states.
Habeck emphasized that citizens could send letters of thanks to the Union for possible higher electricity prices. She rejected the accusations. “It was only the failure of the traffic lights that led Germany to this situation; that was a constitutional violation,” said parliamentary group vice-president Jens Spahn. “This government has no control over its finances; it has been throwing money around like there is no tomorrow for two years.” Now it is the government’s job to set priorities.
The FDP brought cuts in social spending to plug the billion dollar hole. The traffic light coalition needs to talk about where the welfare state can make its contribution to budget consolidation, said FDP parliamentary group leader Christian Dürr of the Funke media group. Tax increases, on the other hand, are the wrong way to stimulate the economy and make Germany competitive again as a business location. Expenses for pension insurance and basic security are among the largest in the federal budget. The budget of the Federal Ministry of Labor and Social Affairs is more than 165 billion euros – more than a third of the total budget.
SPD parliamentary group deputy Sören Rix rejected the FDP proposal. “If the FDP now brings cuts to social benefits into play, it is not only playing with the cohesion in the coalition, but is also massively endangering democratic cohesion in our country.”