Discussion about the federal budget
“The most severe sentence that could be passed”
By Marko Schlichting
November 21, 2023, 4:14 a.m
The Federal Constitutional Court overturns the federal government’s supplementary budget and suddenly there is a gap of 60 billion euros in the budget. How to deal with it? Within the federal government, ideas differ widely, as “Hard but Fair” makes clear.
The household chaos is perfect. Last Wednesday, the Federal Constitutional Court declared the supplementary budget for 2021 null and void. In it, the federal government had reallocated a 60 billion euro shadow budget, which was actually supposed to be used for Corona aid, into the Climate and Transformation Fund (KTF). The money was intended to support the economy, which has been hit by Corona and the ecological restructuring in Germany.
“The verdict is very profound,” says SPD General Secretary Kevin Kühnert on “Hart aber fair” on ARD, which discusses the consequences for the federal budget. “We made a mistake,” admits Kühnert. One is subject to a legal misjudgment. The Green Party parliamentary group leader Katharina Dröge also says: “From a legal point of view, it is clear: we assessed it incorrectly, and we are all annoyed that this incorrect assessment turned out the way it did.” The companies went through two serious crises. The government wanted to support them and at the same time ensure that the economy could prepare for the future. That must also be the claim. “Otherwise many people in this country will be worried about their jobs. We want to give them the security that things will continue in this country.”
It was “the strictest verdict that could have been made,” says economist Jens Südekum, who is part of Federal Economics Minister Habeck’s advisory staff. He admits that he was surprised by that. The ruling “will not make financial policy any easier in the future, especially in times of crisis,” explains Südekum.
The ruling shows that politicians will have to deal with the money collected through taxes in a disciplined manner in the future, says Serap Güler from the CDU. “We have to talk about priorities,” demands Linda Teuteberg from the FDP. The former general secretary of the Liberals is certain: the Karlsruhe ruling strengthens the debt brake.
What the parties want
But here again a dispute is brewing in the traffic light coalition. The debt brake was decided in 2009 by the then grand coalition, but the FDP and the Greens did not agree with it. Nothing has changed in this attitude among the Greens. Now it’s about continuing the economic projects that have been decided, says Katharina Dröge. This is important for Germany as a business location. However, Dröge also sees potential for savings: “We are promoting the reduction of environmentally harmful subsidies, which is 60 billion euros in the federal budget.” At the same time, Dröge can imagine another special fund, i.e. another shadow budget, that supports the economy in its ecological restructuring. She sees no savings potential in social projects such as citizen’s benefit or basic child welfare. “In my opinion, a country as rich as ours should not afford child poverty.”
CDU politician Serap Güler sees it completely differently. She is against the citizen’s benefit increase on January 1st and against the basic child security, as it is supposed to start in January. If both were suspended, one could save seven billion euros. “We have the education and participation package, which is also intended to help combat child poverty. This package is not fully used every year. (…..) This basic child protection currently means nothing other than that there is more bureaucracy.” Güler can also imagine a fund for economic development.
For Linda Teuteberg, it’s all about saving. “We have to look at all points. Nothing is excluded,” she says on “Hard but Fair”. Similar to Katharina Dröge, she is in favor of savings, but does not want to exclude the social budget. For her, this includes citizens’ money: “We certainly have to question the fact that citizens’ money is increasing faster than the incomes of working people.” At the same time, Teuteberg is calling for more work incentives for citizens’ benefit recipients.
Kevin Kühnert wants to save as little as possible in the social sector and points out: “Of course you can somehow squander 60 billion euros if you go through everything with a very thick red pen. The price for this is (…..) that this society is falling apart. ” He and his SPD colleagues wouldn’t raise their hands for that. Together with his party leader Saskia Esken, he is committed to reforming the debt brake.
This is also what Jens Südekum suggests, who can even imagine their suspension again. He suggests that the debt brake should only apply to consumptive government spending, i.e. spending that currently has to be made – such as citizens’ money or pensions. On the other hand, investment expenditure that is directed towards the future should be financed through loans.
The Ministry of Finance has now reacted to the court ruling from Karlsruhe. Half an hour after the broadcast, it was announced that a temporary budget freeze had been imposed.