Federal Finance Minister Christian Lindner (FDP) has clearly rejected the initiative by Berlin Prime Minister Kai Wegner (CDU) to suspend the debt brake. “The statements from the CDU show that sustainable state finances are not a matter of course,” Lindner told the “Rheinische Post”.
“On the one hand, massive amounts of tax money are being distributed, on the other hand, the unwillingness to set priorities is then to be blurred with debt. Fortunately, the debt brake has constitutional status and is not left to the discretion of politicians,” the FDP chairman made clear. He called the path suggested by Wegner “risky”.
Berlin’s governing mayor had called for the debt brake to be put on hold for five years in order to allow investments in new schools, housing subsidies and help for a secure and affordable energy supply.
Union support
CDU General Secretary Carsten Linnemann had also already rejected Wegner’s proposal. “The debt brake is immovable, the CDU will not deviate a millimeter from it,” Linnemann told the “Neue Zürcher Zeitung”. This attitude was reinforced by the parliamentary manager of the Union faction, Thorsten Frei.
“Compliance with the debt brake is a given for the CDU/CSU parliamentary group,” Frei told the “Rheinische Post”. The record tax receipts also showed that it was not a revenue problem but an expenditure problem. Just help here to prioritize. The federal chairman of the Junge Union, Johannes Winkel, called the debt brake a central instrument for the future ability of the younger generation to act.
Economists at Wegner
Wegner, on the other hand, is backed by economists. “Kai Wegner is right and says the obvious, namely that the debt brake and the neglect of investments are a central cause of Germany’s economic misery and lack of competitiveness,” said Marcel Fratzscher, President of the German Institute for Economic Research (DIW). the newspaper.
The proposal to suspend five years is a “smart compromise” to use the time “to replace the debt brake with a smart rule geared towards future investments”. The head of the employer-related Institute of the German Economy (IW), Michael Hüther, had also approved Wegner’s proposal. “The debt brake is proving to be a brake on tax cuts,” said Hüther of the “Rheinische Post”.
The debt brake anchored in the Basic Law stipulates that the budgets of the federal and state governments are to be balanced without income from loans. There is, however, a leeway that for the federal government amounts to a maximum of 0.35 percent of gross domestic product. In the event of natural disasters or other emergencies, the debt brake can be suspended, which happened in 2020 and 2021 because of the corona pandemic.
