Global crises cost the military billions. But the SPD and the Greens want more money for social issues – and are shaking up the debt brake. The FDP is stubborn.
Munich – Russia’s war of aggression against Ukraine, conflicts in the Middle East, civil war in Syria, power struggles in Sudan: Due to the numerous international conflicts and the possible financial consequences, SPD leader Saskia Esken has called for the debt brake to be suspended again. Economics Minister Robert Habeck (Greens) also recently expressed doubts about the debt brake anchored in the Basic Law. Finance Minister Christian Lindner (FDP) counters this – and defends the planned savings in the 2024 budget.
Esken and Habeck argue against the debt brake for investment and crisis reasons
“The ongoing crises (…) are creating challenges that we cannot meet from a normal budget without neglecting other tasks,” said Esken Rhenish Post. Crisis management at the expense of social infrastructure, democracy promotion or integration – that cannot be done with the SPD. “I am convinced that we need another exception to the debt brake regulation.”
Economics Minister Habeck also recently expressed his concerns about the debt brake and at the same time promised billions in aid for industry. In his presentation of the new industrial strategy, the Green politician emphasized that the change towards a climate-neutral industry requires significant investments. He also pointed out geopolitical changes that had not yet been taken into account. As a result, it is now appropriate to check “whether the financial policy rules that we have set ourselves are still appropriate at this time,” said Habeck. Habeck would also like to reward work in old age more in the future.
Finance Minister Lindner remains convinced of the austerity measures of the traffic light coalition in 2024
Finance Minister Lindner recently confirmed that he would continue the traffic light coalition’s planned austerity measures for the 2024 budget. The budget for 2024 calls for spending of 445.7 billion euros, around 30 billion euros less than this year. “We have to refocus,” said the FDP politician recently when presenting the draft budget in the Bundestag. The time of crisis-related additional spending is over, the debt brake will be adhered to again in the core budget next year, said Lindner. The Federal Finance Minister goes on to say that Germany simply can no longer afford endless new debt. In the coming year alone he expects interest expenses of 37 billion euros.
The federal government is expecting 3.8 billion euros more tax revenue for 2024 than forecast in May. However, since the estimate for the current year is 4.5 billion euros below the last one, this will hardly lead to any significant relief in the budget. “There is no new scope for distribution,” said Lindner when presenting the figures in Berlin. More than ever, it’s about setting priorities wisely. “Now is the time to make bold spending decisions.”
Debt brake unsuitable for investments in modern infrastructure – Esken criticizes the current design
Esken, on the other hand, argues that the debt brake “in its current form” is unsuitable to “manage the backlog of investments in modern infrastructure.” If it turns out that the debt brake acts more as an obstacle to investment and innovation, “then “We have to overturn this regulation,” said the SPD chairwoman.
The debt brake, which was incorporated into the Basic Law in 2009, requires that the federal budget largely avoids significant borrowing. However, a small margin of 0.35 percent of gross domestic product is provided. In situations such as natural disasters or other emergencies, the debt brake can be suspended, allowing increased borrowing. In the last three years, the federal government has made use of this exemption due to the Corona crisis and the conflict in Ukraine. (fr)
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