FDP is cautious, Union is threatening
Greens advocate reform of the debt brake
November 20, 2023, 3:07 a.m
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The Federal Constitutional Court’s budget ruling is putting the federal government’s financial room for maneuver under severe pressure. The SPD and now the Greens are therefore committed to suspending or reforming the debt brake. The traffic light partner doesn’t think much of it. The Union is outraged.
Following the Federal Constitutional Court’s budget ruling, the Greens are calling for a reform of the debt brake in order to stimulate further investment projects. The debt brake is “badly done economically,” says Katharina Dröge, the leader of the Green Party in the Bundestag, to the Berlin “Tagesspiegel”. It slows down necessary investments and is “in its current form a burden on Germany as a business location,” explains Dröge. “It is now becoming clear that the debt brake is not flexible enough to properly support people and companies, even in times of crisis.” The traffic light coalition will agree on a common solution “in a timely manner”.
The SPD seems to support these plans. “Since we find ourselves in a continuing crisis situation due to external influences, I continue to advocate suspending the debt brake for 2023 and 2024,” said SPD leader Saskia Esken in the newspapers of the Funke media group at the weekend. At the same time, the challenges of climate change, digitalization and demographic change, which span financial years and levels, would make a general reform of the debt brake “inevitable”.
FDP is shy
But the third member of the traffic light is skeptical. The financial policy spokesman, Markus Herbrand, also told the “Tagesspiegel” that solutions would be found “where the judgment could influence the ongoing budget deliberations”. Nobody has to fear budget blockages like in the USA. But the Liberals’ budget manager restricts: “We Free Democrats reject tax increases or additional debt to raise the lost funds.”
The FDP General Secretary Bijan Djir-Sarai joins in. In the “Tagesspiegel” he recommends that his own coalition “see the Karlsruhe judgment as a mandate to precisely strengthen compliance with the debt brake.” However, he left it open what a precise strengthening of the debt brake might look like.
Union warns again
Last Wednesday, the Federal Constitutional Court banned the traffic light from moving remaining funds from the Corona Fund launched in 2020 into the Climate and Transformation Fund (KTF) and significantly restricted the coalition’s financial scope for action. The Union faction in the Bundestag successfully sued against the redeployment.
The Union’s budget holders are already warning the traffic lights not to implement the newly formulated plans, declare an emergency for the current year and suspend the debt brake again. “The only emergency we have is a political emergency caused by the federal government itself,” said CDU/CSU chief budget officer Christian Haase to the newspapers of the Funke media group. “But there is no economic emergency, otherwise the federal government would have had to declare it shortly after its autumn forecast in October.”
Because of the corona pandemic, the federal government subsequently increased the 2021 budget by 60 billion euros in the form of a loan authorization. In such exceptional situations, it is possible to take out loans despite the debt brake. In the end, the money was not needed to deal with the pandemic and its consequences. The current federal government made up of the SPD, Greens and FDP wanted to use the money for the so-called climate and transformation fund and, with the approval of the Bundestag, redeployed it retroactively in 2022.