Federal Finance Minister Lindner wants to redefine the debt brake in order to enable more flexible adjustment to economic fluctuations.
Berlin – Federal Finance Minister Christian Lindner (FDP) is planning a partial reform of the debt brake next year, as demanded by the SPD and the Greens. This emerges from an interview that Lindner gave to Editorial network Germany has given. The considerations for the reform come following the budget ruling of the Federal Constitutional Court, which rated suspending the debt brake as extremely risky.
Lindner continues to reject fundamental reform, as demanded by some political actors. Nevertheless, he sees a partial reform as possible that focuses on the calculation of the so-called economic component. This revision is intended to ensure that the amount of possible debt is more closely linked to economic fluctuations.
Finance Minister announces debt brake reform: realignment for 2024 without impact on the current budget
The Finance Minister emphasized that the planned reform has nothing to do with the federal government's current budget situation. He explained: “The intention is to adapt the calculation to the current state of economic research, which will change the range of fluctuations. However, this does not increase the potential debt over several years. Because the greater scope in the downturn is collected again in the upswing. The implementation of this reform is planned for 2024.
The discussion about a major reform of the debt brake is being conducted controversially by various political camps. Some Union Prime Ministers support general changes to enable more investment, while others, including Schleswig-Holstein's Prime Minister Daniel Günther, are against it.
The SPD and the Greens are calling for reform, the FDP and parts of the Union remain skeptical
The debt brake anchored in the Basic Law is being criticized following the federal budget chaos. The SPD and the Greens are calling for a major reform, which would require a two-thirds majority in the Bundestag and Bundesrat. The FDP and parts of the Union reject this. An adjustment of the economic component requires loud RND no change to the Basic Law, just a majority of the traffic light coalition.
Supporters of major reform argue that investments in the future are necessary, especially in the areas of transport routes, bridges, schools, police or fire stations. Berlin Reacting Mayor Kai Wegner (CDU) emphasized the urgency of such investments: “These are vitally important investments that our country needs now.”
Critics warn of debt, Scholz retains the option to suspend
Opponents, including Union faction leader Friedrich Merz and Schleswig-Holstein's Prime Minister Günther, argue that debt should be avoided for the sake of debt. Günther said: “We must not permanently spend more money than we earn.” He believes the debt brake and the current regulations are correct. Chancellor Olaf Scholz (SPD) does not rule out suspending the debt brake again next year if the situation in Ukraine worsens. The debt brake has been anchored in the Basic Law since 2011 and requires the federal and state governments to “basically balance their budgets without income from loans”, with the possibility of suspension in exceptional emergency situations.
The discussion was triggered by the budget ruling of the Federal Constitutional Court in November, which declared the reallocation of 60 billion euros in the 2021 budget to the climate and transformation fund invalid. This led to funding gaps in the federal budget, which the traffic light coalition was able to reach agreement on overcoming this week after weeks of dispute. (Ekaterina Jalunina / dpa)
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