Not only is the climate and transformation fund not legal in its current form, the economic stabilization fund is also shaky. In the budget committee, federal government experts point out a possible way out. There is an increasing dispute about how to compensate for the definitely missing 60 billion euros.
Almost a full week has passed since the now historic debt brake ruling, but the effects are still not fully foreseeable. This applies equally to Germany’s ability to invest in the midst of a recession and to the future of the federal government. The survival of the traffic light coalition depends directly on whether the three-party alliance can agree on a constitutionally compliant path that at least guarantees the financing of the most important projects for greater economic growth and climate protection. In this tense situation, the traffic lights at least gave the all-clear on Tuesday.
One by one: Before its expected last meeting on Thursday on the 2024 budget, the responsible Bundestag committee heard from nine professors from the fields of economics and law as well as Jan Keller from the Federal Audit Office. Several experts – especially those who were invited by the CDU/CSU and AfD – attested that the federal government had seen the current emergency with full eyesight.
In fact, the Federal Audit Office, among others, had warned about this as early as 2022to reallocate unused Corona loans that were taken out while the debt brake was suspended for the Climate and Transformation Fund (KTF). The Karlsruhe judges declared the use of these 60 billion, spread over several years, null and void.
Chance of survival for “Doppelwumms” funds
This results in five significant problems for the traffic light: The numerous projects financed by the KTF are in question. Without these funds, the regular debt limit for the coming year will change, which secondly calls into question the almost finished budget. Thirdly, other special funds, especially the 200 billion euro Economic Stabilization Fund (WSF), which has become known as “Doppelwumms”, could also be illegal. Fourthly, this puts the legality of the 2023 budget in jeopardy and, fifthly, that of the 2024 budget.
Now for the good news: Legal scientist Hanno Kube, who represented the 60 billion lawsuit for the Union in Karlsruhe, is, like other experts, of the opinion that the WSF is “very, very similar” to the unconstitutional KTF. Here too, loan authorizations from the 2022 energy emergency are to be used in the following years. But: Kube and the lawyer Alexander Thiele, who was invited by the SPD, both assume that the Bundestag could still determine that the economic emergency of 2022 will continue in the current and next year.
“The need for explanation is high,” says Kube. And the higher it is, the longer it has been since the original reason for suspending the debt brake. The federal government would have to prove to the Bundestag at least this year and next year – and if in doubt also to the Constitutional Court – that the original shock continues to have an impact. In the case of the WSF, this would be the impact of the Russian attack on Ukraine on the costs of German energy supply. Federal Minister of Economics Robert Habeck had already stated that he was prepared for the WSF to be unlawful in its current form. After Federal Finance Minister Christian Lindner imposed the budget freeze, further authorizations from the WSF are also blocked – apparently based on the same assumption.
Lindner’s people are listening
At the expert hearing, Lindner’s State Secretary Florian Toncar announced that his house would present the committee with an assessment of the consequences of the debt brake ruling by Thursday. However, they also wanted to hear from the experts invited by the Bundestag beforehand. The ministry officials will therefore have heard carefully that Kube and Thiele have shown a way to save the WSF through renewed emergency determinations for the years 2023 and 2024. The financial lawyer Henning Tappe, invited by the Greens, also sees this possibility.
The FDP has no interest in changing the debt rule itself or seeking a suspension again. The decision that the consequences of the gas price shock will continue from 2022 to the present day would, on the other hand, be less of a loss of face for the Free Democrats than a complete waiver of the WSF funds: The construction of the “Doppelwumms” fund is even more important than the reallocation of funds in the KTF the responsibility of the incumbent Federal Finance Minister.
Plus: If the government loses significantly more crisis loans than the 60 billion euros it has already lost, it would be even more difficult for the FDP to avoid a debate within the coalition about reforming the debt brake and possible tax increases. But there is at least a remaining possibility of financing the up to 20 billion euros that are missing for the coming year alone.
Where to save?
The federal government seems to accept that it will have to amend the budget to be passed this week in the new year as a supplementary budget – something the Union warns about. In this way, the federal government could react in January to the currently fluid debt limit – the regular upper value of which is still controversial after the Karlsruhe ruling – and subsequently allocate funds from the regular budget to KTF projects. But that would mean that savings would have to be made elsewhere first. The coalition wants to reach agreement on this by the end of the year.
How this unity will come about remains unclear for the time being. In the ntv early start, SPD parliamentary group vice-president Matthias Miersch called for a special climate protection fund, which, like the Bundeswehr special pot, would require the consent of the Union. SPD leader Saskia Esken pleaded in the Funke media for the debt brake to be suspended again in the current and next year, which the FDP has so far rejected. Its Secretary General Kevin Kühnert campaigned for a reform of the debt brake, which in turn would also need the votes of the Union. Together with the Greens, the Social Democrats rejected attempts from the FDP to save on social spending, such as citizens’ money.
No lawsuit from the AfD and the Union for the time being
The Green Party leadership and the Federal Economics Minister, who is significantly affected by the ruling, will have to answer to their own people on the issue from Thursday. At the Green Party’s federal party conference in Karlsruhe, delegates are expected to insist that their party makes no further compromises when it comes to climate protection. The debate on the effects of the debt brake ruling is not scheduled until late Friday night. In any case, the stakes on the future of the climate transformation fund will only be finally driven in after the party conferences of the Greens and SPD (December 8th to 10th).
The Union and the AfD will not sue the WSF in the short term in order to tear it down like the KTF. The AfD lacks the necessary 25 percent share of seats in the Bundestag to seek legal action on its own. The Union would first like to wait and see how the government reacts.
It is also possible that the conservatives themselves are not entirely sure about the economic impact of their lawsuit’s success. In the Bundestag hearing, the CDU/CSU parliamentary group only invited one economist among its own three experts: Thiess Büttner expressly welcomed the future validity of the debt brake. But the economist from the University of Erlangen-Nuremberg also assessed the effects of the elimination of the KTF billions for private investments by citizens and companies as harshly as Jens Südekum, invited by the SPD, and Michael Hüther, quoted by the Greens: Büttner spoke of a “shock “.