Following the Federal Constitutional Court’s budget ruling, the Ministry of Finance (BMF) is blocking numerous items in the federal budget. “The BMF is stopping the commitment authorizations in 2023 in order to avoid prior burdens for future years,” said ministry circles on Monday evening. This affects the budgets of all ministries.
A commitment authorization gives an administration the opportunity to enter into payment obligations for future years, for example for multi-year projects. Current editions this year are therefore not affected.
It also said that existing liabilities would continue to be met, but that no new ones would be allowed to be entered into. “In exceptional cases, commitment authorizations can be unblocked.”
Struggling to deal with the verdict
The traffic light coalition continues to struggle with how to deal with the ruling from Karlsruhe. The SPD reiterates its calls for the debt brake to be suspended in order to plug the 60 billion euro financial hole. Federal Economics Minister Robert Habeck (Greens) is also not a supporter of the debt brake, but does not see a majority in favor of changes.
Last week, the Federal Constitutional Court declared a reallocation of loans worth 60 billion euros in the 2021 budget to be null and void. They were approved to deal with the Corona crisis, but should be used for climate protection and the modernization of the economy. Now the billions in the so-called climate and transformation fund are not available. The federal government had then temporarily put certain projects on hold that were to be financed from the fund. This was about commitment authorizations for 2024 and subsequent years.
Today, experts are supposed to help the Bundestag and the federal government correctly interpret the consequences of the Karlsruhe budget ruling. The Budget Committee listens to experts appointed by the various political groups. The main issue is whether the budget for 2024 can be decided despite the ruling.
Mützenich wants to suspend the debt brake
In order to mitigate the effects of the budget ruling, SPD parliamentary group leader Rolf Mützenich believes it is necessary to suspend the debt brake – at least for 2024. “In my opinion, we will not be able to avoid making an exception for 2024 – possibly longer,” said Mützenich the magazine “Stern”. “The tasks that lie ahead of us will not be completed next year. There are huge challenges ahead of us, in terms of climate change, the new industrial policy, but also in terms of foreign policy.” SPD leader Saskia Esken had previously advocated not applying the debt brake in 2023 and 2024.
Federal Minister of Economics Habeck considers the debt brake in its current form to be no longer up to date, but does not see a majority in favor of reform. “Personally, I make no secret of the fact that I think the way the German debt brake is designed is not intelligent enough,” said Habeck on Monday evening on the ARD “Tagesthemen”. It is “very static” and does not distinguish between money that is spent during the year and investments in the future that will only pay off years later. That doesn’t seem wise to him, said the Green politician.
The debt brake “was also built in a different time, when we always had cheap gas from Russia, when China was always our workbench or our purchase market, when the Americans were always reliable, loyal friends and relieved us of the military burden because there was none There was war in Europe,” said Habeck. These conditions have changed.
The debate about the debt brake is still not helping this year. “There is a coalition agreement, the coalition partners and also the opposition have made it clear that they do not share my opinion and that of many others, many economists. In this respect, this is probably a decisive, perhaps a very decisive debate for the future. For them “In the present we will have to find the money differently,” said the Economics Minister.
Bartsch proposes a “climate wealth tax”.
One suggestion comes from Left Party leader Dietmar Bartsch – he called for a “climate wealth tax”. “After the ruling from Karlsruhe, there can be no social cuts to plug the 60 billion hole,” Bartsch told the editorial network Germany (Tuesday). Not the “little people”, but multimillionaires and billionaires should be brought in to modernize Germany. Further savings would be possible in the special fund for the Bundeswehr, which the Left rejects. It should be put to the test and relevantly reduced, demanded Bartsch.
