Ampel coalition wants to suspend debt brake for 2023
Published: Thursday, Nov 23rd 2023, 17:10
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Due to the Karlsruhe budget ruling, the traffic light coalition wants to make use of the debt brake exception for this year. Finance Minister Christian Lindner (FDP) announced in Berlin on Thursday that he would present a supplementary budget to the cabinet next week in consultation with Chancellor Olaf Scholz (SPD) and Vice-Chancellor Robert Habeck (Greens). A ministry spokeswoman added that the federal government would propose to the Bundestag that an extraordinary emergency situation be declared. In this way, loans that have already been used this year are to be legally secured retrospectively.
Without the safeguard, the 2023 budget would have been in danger of breaching the constitution following the ruling by the judges in Karlsruhe. This is because the judges ruled that the federal government may not set aside emergency loans for later years. However, according to experts, this is exactly what the federal government did in the economic stabilization fund for the energy price brakes.
By the end of October, 37 billion euros had already been spent from this fund this year, and further money is likely to be added by the end of the year. In addition, aid from a fund for flood victims, which was created in 2021 under similar conditions, is to be secured. In total, loans amounting to around 45 billion euros are to be placed on a constitutionally secure basis. "No new debt will be taken on, but only the funds already used to overcome the crisis will be placed on a secure legal basis," emphasized Lindner's spokesperson.
The minister explained: "I see it as my task to clear the air now." Only then would it be possible to talk about next year's budget and the years to come.
Emergency situation could be justified by energy crisis
In order to use the exception to the debt brake, the Bundestag must decide on an emergency situation. According to Article 115 of the Basic Law, this is provided for "in the event of natural disasters or extraordinary emergency situations beyond the control of the state and which significantly affect the state's financial situation". According to experts, the federal government could argue that the consequences of the energy crisis were still being felt at the beginning of 2023 to justify such an emergency situation. At a hearing in the Bundestag, experts made it clear that, in their view, this justified a new emergency resolution.
The federal budget for the current year is to be put on a constitutionally secure footing before the end of the year with the supplementary budget. However, it remains to be seen when the federal budget for the coming year can be adopted. Following the ruling of the Federal Constitutional Court, the draft must be thoroughly revised.
Decision date for 2024 budget still open
The SPD, Green and FDP parliamentary groups have therefore canceled the budget resolution planned for next week in the Bundestag. However, they have not completely given up on a conclusion before the end of the year. There is the possibility of shortening the deadline and holding special sessions, according to the coalition. Scholz said on Wednesday evening that he expected a swift and very timely conclusion.
He also emphasized that the traffic light coalition wanted to stick to its plans in social, climate and economic policy. However, it is still unclear what will actually happen to the projects that are to be financed from the climate and transformation fund. Following the Karlsruhe ruling, this special fund for climate protection and the development of a carbon-neutral economy lacks 60 billion euros, which had already been firmly earmarked. The court had declared the reallocation of these loans, which had actually been approved to combat the coronavirus, null and void.
According to the coalition, it will still be possible to meet the legally binding expenditure in the coming year. The fund also has income from the CO2 price, among other things. However, the remaining money will not be enough for all projects. The SPD, Greens and FDP are in strong disagreement about where to cut, prioritize or completely eliminate funding.
CDU politicians in favor of reforming the debt brake
Economists and politicians from the SPD and the Greens had suggested a reform of the debt brake to solve the problem. On Thursday, a CDU Minister President surprisingly also argued for this. "The debt brake is a good idea in terms of sound finances. However, I consider its current form to be dangerous," explained Berlin's governing mayor Kai Wegner on X (formerly Twitter) as well as in an interview with the magazine "Stern". "Because, as I have been saying for some time, it is to be feared that the debt brake will increasingly become a brake on the future." In his opinion, loans should be permitted for investments, Wegner said.
CDU party leader Friedrich Merz had previously defended the debt brake on the ARD talk show "Maischberger". "At the moment, I don't see that we need to approach the debt brake," he said.
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