State aid to mitigate the high prices for gas, fuel & Co. costs – but the constitution sets new debt limits. A dispute has therefore arisen in the governing coalition.
In the dispute over a possible suspension of the debt brake because of the current burdens on citizens, the fronts within the traffic light coalition remain hardened.
“The state cannot absorb every price increase,” said Federal Finance Minister Christian Lindner (FDP) of the Düsseldorf “Rheinische Post” with a view to the high inflation. “Further relief measures would have to move within the framework of the debt brake.” He emphasized that in an economic downturn, higher borrowing is also permitted. Lindner will present his draft budget to the cabinet on July 1.
Greens want to suspend the brakes
The Greens reiterated their call for the debt brake to be suspended again. “In times of crisis, austerity is the wrong tool. Unfortunately, in 2023 we will very likely have to contend with the massive consequences of the Ukraine war, fossil fuel inflation due to increases in gas and oil prices and the corona pandemic,” said Green budget spokesman Sven-Christian Kindler of the newspaper.
The debt brake anchored in the Basic Law provides that the budgets of the federal and state governments are balanced in principle with little or no new debt. Exceptions are the phases of weakness mentioned by Lindner, “natural disasters or extraordinary emergency situations that are beyond the control of the state” – which also includes the Corona crisis.
Low earners suffer particularly
Various proposals are currently circulating from different political camps for further relief for citizens worth billions – especially for low earners who are suffering from high energy prices. This week, the heads of the traffic light coalition had not yet made any decisions at a meeting.
The SPD in the Bundestag brought special payments to employees to secure their livelihood into play. “If employers and unions agree on one-off payments to employees in order to cushion particularly difficult moments in the coming months, then the state could also supplement this in a meaningful way,” said Rolf Mützenich, the parliamentary group leader of the Funke media group. However, he also emphasized: “We will not be able to cushion everything.”
Chancellor Olaf Scholz (SPD) wants to hold a “concerted action” on July 4th together with top representatives of employees and employers to discuss how price developments can be brought under control.
Source: Stern
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