Federal Minister of Economics Robert Habeck considers the debt brake in its current form to be no longer up to date. It was built “in a different time”: “When we always had cheap gas from Russia, when China was always our workbench or our purchase market, when the Americans were always reliable, loyal friends and relieved us of the military burden because it “There was no war in Europe,” said Federal Economics Minister Robert Habeck on Monday evening on the ARD “Tagesthemen”.
The debt brake passed in 2009 is “very static” and does not differentiate between money that is spent over the course of the year and investments in the future that will only pay off years later. That doesn’t seem to make much sense to him. “Personally, I make no secret of the fact that I think the way the German debt brake is designed is not intelligent enough,” said the Green politician.
Habeck emphasized that there is great uncertainty after the Federal Constitutional Court’s ruling. “This does not affect any seemingly absurd climate protection projects, but everyone will be affected by it now. The German economy will shrink as a result of this ruling and will grow less strongly than expected. Economic stimulus money will be withdrawn from the country.”
The debt brake anchored in the Basic Law gives the federal government only limited scope for taking out loans. Exceptions are permitted in the event of natural disasters and in exceptional emergency situations, such as most recently due to the corona pandemic. The FDP is one of the supporters of the debt brake, but it is controversial in parts of the Greens and SPD.
Last week, 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. Now the billions are not available. It is unclear to what extent the ruling could have consequences for the handling of debt-financed special funds at the federal and state levels. This Tuesday, the Bundestag’s Budget Committee will hear experts on the consequences of the ruling.
Conciliatory tones are now also coming from the Union, whose representatives had violently attacked the traffic light coalition in recent days because of its budget policy. We now have to calmly look at how we can manage the budget for 2024, says CDU budget expert Christian Haase. He assures the government of constructive cooperation. There are very important projects in the Climate and Transformation Fund that must be continued beyond the legislative period. “Because we all know that investments in the economy only occur when the framework conditions are stable,” emphasized the CDU politician.
At the same time, Haase questioned important projects of the traffic light coalition. He mentioned basic child security, citizen’s benefit and the heating law. The Union does not want to massively cut social benefits, but is questioning the additional growth, said Haase.