Thursday October 21, 2021
Circumventing the debt brake
KfW wants to involve traffic lights as a major investor
The state development bank KfW has been supporting small and medium-sized enterprises and start-ups for many decades. The planned traffic light coalition is also building on its capital. In this way, important projects should be financed – bypassing the debt brake.
Before the start of their coalition negotiations, the politicians of the traffic light parties concretized their ideas on how to finance the planned investments. The state development bank KfW is to become an integral part of the financing. “We need a lot of investments,” said FDP General Secretary Volker Wissing on ZDF. KfW will “of course play a role”.
KfW could finance many investments in climate protection, for example – while respecting the guidelines implemented by the FDP in the traffic light explorations: “No tax increases and no loosening of the debt brake,” Wissing continued.
“Use all leeway”
Michael Kellner, the director of the Green Party, also spoke out in favor of financing part of the planned investments through KfW. The future government must “use all leeway,” said Kellner on ZDF. “Now the coalition negotiations are about exploring this leeway and describing it in detail.”
Kellner rejected the accusation that the future government could set up a kind of shadow budget by making greater use of KfW financing and thus bypass the debt brake. “We didn’t invent KfW, it has been around for a long time.”
The Green politician regretted that his party had not been able to assert itself against the FDP in the exploratory talks with its demand for a “moderate” increase in income tax. “I think it’s a shame, but that’s just how it is with compromises in politics,” said Kellner.
Promotion of investment projects
KfW has been granting loans for the promotion of investment projects on behalf of the federal and state governments since 1948. In the past year, according to its own information, it provided a funding volume of 135.3 billion euros, 33 percent of which went into measures for climate and environmental protection.
KfW refinances its promotional business almost entirely through the international capital markets. In 2020, it raised 66.4 billion euros.
Her focus is on promoting small and medium-sized enterprises and start-ups, providing equity capital, programs for the energy-efficient renovation of residential buildings and supporting measures to protect the environment.