For 2023 and 2024
SPD leader Esken for suspending the debt brake
November 18, 2023, 3:01 a.m
The Federal Constitutional Court’s ruling on the 2021 supplementary budget is a colossal setback for the traffic light government. The chairwoman of the SPD is calling for the debt brake to be suspended again – a demand that is not new from her. An economic system also expresses itself in a similar way.
After the Federal Constitutional Court’s budget ruling, SPD leader Saskia Esken is calling for the debt brake to be suspended again in order to finance necessary investments. “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,” Esken told the newspapers of the Funke media group. 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”. Esken had already spoken out in favor of suspending the debt brake again before the German highest court’s ruling on the 2021 supplementary budget.
Regarding the verdict, she said that it “represents a major challenge” for the federal government, but also some federal states, especially in connection with climate change and its social and economic consequences. The Constitutional Court had already made it clear in 2021 that the Basic Law also resulted in an obligation to protect against the consequences of climate change. “Accordingly, we will join forces to, on the one hand, improve the modernization of the country, our infrastructure and our education system and, on the other hand, to secure the financing of the climate and transformation fund,” explained the SPD party leader. “It is clear that we will not allow any savings in climate protection and its socially just design or in the welfare state.”
She also renewed the SPD’s demand to ensure additional income through higher taxes for top earners. “The principle remains that strong shoulders have to carry more than weak shoulders,” she said. “In order to be able to shape things, we need a state capable of acting that invests in crisis situations.” Corresponding suggestions can be found in the SPD’s key proposal for the upcoming party conference.
Economics Schnitzer also for suspension
The head of the economists, Monika Schnitzer, has also spoken out in favor of suspending the debt brake next year and in the medium term for reforming the rule in the Basic Law. “A reform of the debt brake, which would create greater scope for debt financing of net investments, could provide relief for climate projects,” Schnitzer told the “Rheinische Post”. “A debt-financed disbursement of climate money would be out of the question because it is not an investment,” she added.
“However, it seems unlikely that we will be able to agree on a reform of the debt brake in this legislative period,” explained the chairwoman of the Advisory Council for the Assessment of Overall Economic Development. “A transparent solution could be to justify a renewed exemption from the debt brake based on the effects of the energy crisis and the resulting additional expenditure required to cushion the burden and the necessary expansion of energy supply,” said Schnitzer. The latest ruling by the Federal Constitutional Court significantly limits the coalition’s financial scope for action. “It will be significantly more difficult to finance the planned investments in climate projects and, as planned, to pay out the climate money from 2025 onwards, with which the income from the CO2 tax is to be returned to the citizens,” said Schnitzer.