Reallocation of 60 billion euros
Traffic light in the budget crisis: Chancellor Scholz is optimistic despite uncertainties
Last week, the planned reallocation of 60 billion euros in the 2021 budget was declared null and void. Despite ongoing uncertainties, the Chancellor is counting Olaf Scholz ensures that the consultations are concluded quickly.
© IMAGO / Bernd Elmenthaler
What happens next with the federal budget? According to the Federal Constitutional Court’s ruling, this question is still completely open. Chancellor Scholz is nevertheless optimistic. The budget crisis should be defused quickly.
The traffic light coalition and the Union want to quickly defuse the budget crisis caused by a constitutional court ruling. Chancellor Olaf Scholz (SPD) expects that the discussions for the 2024 budget will be concluded quickly, although the final meeting of the budget committee on the 2024 budget scheduled for Thursday was postponed. The Union demanded a government statement from the Chancellor next week. “In view of the necessary haste,” the party also agreed to hold a video conference of the Parliament’s Council of Elders this week to discuss how to proceed.
Scholz: Ampel wants to stick to plans for social, climate and economic policy
Last week, the Federal Constitutional Court declared the reallocation of 60 billion euros in the 2021 budget to be null and void. The money was approved as a Corona loan, but was subsequently intended to be used for climate protection and the modernization of the economy. At the same time, the judges decided that the state was not allowed to reserve emergency loans for later years. As a result, billions more are at risk for future projects.
Since the exact impact on the regular budget is still unclear, the Ministry of Finance decided to block certain commitments from all ministries in the budget for coming years as a precautionary measure. On Wednesday, the so-called cleanup meeting of the Budget Committee, in which the final touches were to be put on the 2024 budget, was also canceled.
Scholz said on Wednesday evening after a meeting with Italian Prime Minister Giorgia Meloni: “Respect for parliament means that the government does not announce when exactly parliament will conclude, but that should be done very quickly and very promptly and it can be done quickly and done promptly.” Scholz emphasized that the traffic light wants to stick to its plans for social, climate and economic policy. Specifically, he spoke of the further development of the welfare state, the modernization of the national economy and ecological transformation. This is important for Germany’s competitiveness and protecting the climate.
The SPD chairman Lars Klingbeil warned against hasty steps when adopting the 2024 budget. “It’s better to talk about it for a week, two weeks longer and make the right decisions than to act too quickly now and then perhaps make mistakes later,” said Klingbeil on Wednesday evening on ZDF’s “heute journal”. Of course, he also wants the budget to be passed quickly. Helge Braun (CDU), the chairman of the budget committee, made similar comments in the ARD “Tagesthemen”.
Union writes to the Chancellery and the President of the Bundestag
The Union demanded that Scholz make a quick government statement on the current budget crisis. “The budget and coalition crisis threatens to turn into a crisis of confidence in our state’s ability to act,” says a letter from the Parliamentary Managing Director of the Union faction, Thorsten Frei, to the head of the Chancellery, Wolfgang Schmidt, which was sent to the German Press Agency (dpa) in Berlin on Wednesday (SPD). “In order to avert this, the federal government finally needs clarity and truth.” After the next Bundestag session was called for November 28th, the CDU/CSU parliamentary group suggested using this date to make a government statement, Frei wrote.
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In another letter to Bundestag President Bärbel Bas (SPD), also available to the dpa, Frei calls for a prompt meeting of the Parliament’s Council of Elders in order to discuss further action in good time before the next week of meetings, which begins on Monday. The Union faction is prepared to hold the meeting via video conference later this week “in view of the urgency required”. With the cancellation of the budget committee’s adjustment meeting this Thursday, the budget discussions that were actually planned for next week are “effectively ruled out” and the course of the week’s meeting is unclear.
Warning about shredding the welfare state
Trade unions and social associations urgently warned against cuts in the social sector due to the current budget crisis. “Anyone who believes they can score political points by playing off social policy against investments in the future will wake up in a country full of climate deniers and market radicals,” said DGB chairwoman Yasmin Fahimi to the editorial network Germany (RND/Thursday). Ulrich Schneider, the general manager of the Joint Association, also warned the RND: “We can now only hope that planning security is created as quickly as possible and that the welfare state is not shredded.”
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The managing director of the German Association of Cities and Municipalities, Gerd Landsberg, however, called for investments to be given priority over further social benefits in the “Neue Osnabrücker Zeitung” (Thursday).
Impact on Deutschlandticket and KfW funding programs
The budget ruling also affects the funding programs of the state development bank KfW. On Wednesday, KfW imposed a temporary freeze on applications and commitments for four programs in the housing and construction sector. Promotional loans and investment grants from these programs that have already been promised are not affected. Specifically, these are the “Age-friendly Reconstruction” program, the municipal funding program “Energetic Urban Renovation”, the promotion of cooperative housing and the BMWSB hardship program for housing companies as a result of increased energy costs.
The CDU traffic expert Thomas Bareiß also expects that the price of the Germany ticket could rise significantly. “Looking at the ruling from Karlsruhe, it is clear that the 49-euro ticket will now become a 69, 79 or even 89-euro ticket by June next year at the latest,” said the Bundestag member of the “Rheinische Post” (Thursday ).