After the defeat in the heating law, the Union inflicted another bitter defeat on the traffic light coalition in Karlsruhe. As understandable as the CDU and CSU’s celebration of the Constitutional Court ruling is, it will not last. Even the strongest party according to polls must provide answers after this day.
The joint parliamentary group of the CDU and CSU has fulfilled its key role as the largest opposition party in the Bundestag. With her lawsuit before the Federal Constitutional Court against the reallocation of 60 billion euros in Corona aid, she examined the constitutionality of government actions. Rightly so, say the judges in Karlsruhe, and give a thumbs up to the government’s sleight of hand. The conservatives understandably see the verdict as their success, just as they did with the constitutional judge’s intervention against the legislative process for the heating law. But this time the joy may not last. Because the debt brake, which the Union idolizes, is being called into question more than ever as a result of the ruling.
The Federal Constitutional Court has by no means made a value judgment on the economic and political sense of the debt rule. The judges simply compared the text of the law with government action and determined: What the traffic light coalition had decided with the help of its parliamentary groups, the reallocation of Corona loans into funds for restructuring the economy and infrastructure, is not provided for in the debt brake anchored in the Basic Law. If, on the other hand, the federal government had taken on debt to combat an acute economic emergency caused by the war in Ukraine and had taken the legal route of an exception, the expenditure could have been constitutional.
The debt brake has its merits
A few hours after the verdict was announced, Union parliamentary group leader Friedrich Merz celebrated the “end of all shadow budgets” and at the same time made it clear: “There is no justification whatsoever for easing the debt brake.” The federal government now finally has no other choice than to only budget the money that it actually receives. There is much to suggest that this should normally be the case. It is true that the Federal Republic was only able to withstand the pandemic as much as possible fiscally because of its fiscal sense in previous years: with reserves and cheap loans thanks to its excellent credit rating. It is also true that a completely different debt policy would have fallen on the country’s feet at the latest with the interest rate turnaround. After a long time, debt has become expensive again, even if some people didn’t want to admit it during the years of the zero interest policy.
But the Union, you have to blame it, for not thinking beyond the present: it wants to take on responsibility within the federal government again and has good prospects of doing so, just as it already has government responsibility in the states. But if she thinks that the gigantic challenges can be met solely by reallocating the budget and canceling individual projects, she is lying to herself. There may be excesses in social spending and migration costs. One can question whether gigantic chip manufacturers can only be lured to Germany at the price of double-digit billion subsidies. But the need to transform energy supplies and renew infrastructure is real.
Saying no to debt brake reform is not enough
Firstly because Germany is bound to climate targets – also constitutionally – but also because the success of the economy and the country’s political sovereignty depend on the costs and reliability of the energy supply. There is no sensible alternative to the massive expansion of renewable energies. Even supporters of nuclear power have to admit that it could no longer step in at short notice at this point and would also need billions in start-up financing. Germany also needs a more efficient railway network, a modern energy infrastructure, a sustainable heat supply and energy-efficient buildings. The funds previously earmarked for this purpose in the KTF have also benefited Union-governed countries.
How all these investments should be financed in strict compliance with the existing debt brake and at the same time the defense budget should be permanently increased, while the German economy and the social system are permanently burdened by immense demographic distortions: The Union has no convincing answer to this, nor does the FDP. The SPD’s recent move to open the debt brake for investment spending is more plausible. The proposal also finds support among economists close to employers, not to mention social and environmental associations. But because the Union would have to agree to a change in the Basic Law to reform the debt brake, it can no longer retreat to a blunt “no” in this debate – not as a government party in waiting. The Union, which today can rightly be celebrated as a hunter, could soon become a driven party as a result of the verdict.