Olaf Scholz: The Chancellor’s horror days – how should that end?

Otto Fricke could certainly have done without this “special gift”. It’s the FDP budget politician’s birthday today, but he has no reason to celebrate.

There is a colossal billion dollar hole in the budget that may get even bigger. This year’s budget in its current form could be in jeopardy, while the one for 2024 is in limbo. And the “such a nice hearing” about all these traffic light nightmares, which the chairman of the budget committee, Helge Braun (CDU), presented as a “gift” on his colleague’s birthday, really offers no reason for new composure.

“Everything that is not done to make a birthday more beautiful,” Fricke tries to joke. “But joking aside.”

Ten experts will present their view of the matter to the Budget Committee on Tuesday morning. Ten different opinions, with one thing in common: the situation is serious.

Expert 1: “The 2024 budget is not ready for decision.”

Expert 2: “There will have to be new prioritizations in the budget.”

Expert 3: “In order to make the budget for 2023 legally secure, a subsequent determination of an emergency situation will probably be necessary.”

Expert 4: “We are running into a stubborn investment crisis.”

The traffic light hope for a benign outcome: blown away like the candles on a birthday cake.

Since the Federal Constitutional Court declared the so-called Climate and Transformation Fund void on Wednesday, Olaf Scholz’s government has suddenly lost 60 billion euros. If, after the judge’s ruling, the construction of the Economic Stabilization Fund (WSF) turns out to be an unconstitutional budget trick, a further 200 billion euros would be available for budget planning. Can the 2024 budget be passed as planned despite the financial uncertainties? Is the 2023 budget actually constitutionally incontestable? And anyway: what happens next? With the climate projects? With this coalition?

Even the smallest things suddenly become an ordeal

Answers are feverishly sought at traffic lights. The Chancellor and his coalition are going through days of real chaos, characterized by uncertainty, speculation and conjecture. Late on Monday evening, Christian Lindner, the FDP Federal Finance Minister, extended the spending freeze for the KTF to almost the entire current 2023 budget. After the judge’s ruling, the government apparently doesn’t know what expenses will still be available in the future. The motto: Wait, gain time first, don’t make the next mistake straight away.

There is obviously no “Plan B,” as Finance Minister Lindner announced one day before the judge’s verdict. . The specific consequences of the ruling on budget planning are still being examined. The only thing that is certain is that your nerves are on edge.

Even supposedly small things, like the gastro tax increase, suddenly become an ordeal. Christian Lindner and the SPD and Greens blame each other. Economics Minister Robert Habeck is publicly very irritated: opposition leader Friedrich Merz can be thanked for the misery, he complains. As if the Union had sued Karlsruhe out of pure joy in the conflict.

The uncertainty is growing day by day, of course also in the Chancellor’s party. What happens to electricity prices? What about aid for energy-intensive companies? There are countless questions – unfortunately only a few answers.

Internally, everyone at the Social Democrats was encouraged to keep a low profile as much as possible in public. And so the debate for days has revolved primarily around the future of the debt brake. Some want a reform, others want to suspend it temporarily, others even want it to be long-term. . The calculation behind it: If the brake were removed now, more loans would be possible again. The problem is that no one knows whether the next lawsuit would then be filed in Karlsruhe. Everything stands on feet of clay right now.

Olaf Scholz cannot hope for AI

One person remains largely silent – ​​the Chancellor, of all people. Since his appearance immediately after the Karlsruhe verdict, Olaf Scholz has not addressed the question of how the government plans to raise the missing billions. On Tuesday afternoon at the Ministry of Economic Affairs’ digital summit, he simply said that the answer could not be given by “any AI”. You have to work hard to earn it. Ah yes.

His camp says he doesn’t want to cause more excitement. But even within his party, irritation over his actions is growing. His silence only increases the uncertainty, say critics. Are the Chancellor and Lindner still pulling together? Or are they holding back publicly primarily because they both want to go in completely different directions? Because they argue behind the scenes?

Some in the SPD are already talking about an ongoing power struggle between the two. What’s true: For Lindner, his credibility is at stake. For months he preached how important it was to return to the debt brake. If he applies for an exception again with the traffic light, he will be embarrassed. For Scholz, however, it’s about the chancellorship. He is also considered a supporter of the debt brake. But he is probably an even bigger believer in being able to continue to govern relatively smoothly.

A solution must be found quickly, a sign that the situation is under control. Otherwise, the loss of trust will grow, both outside the coalition and within it.

The Greens are meeting at the party conference at the end of the week; the mood internally was already bad before the debt brake ruling. Now the meeting in Karlsruhe could become even more unpleasant for the party leadership. In any case, it is quite possible that the base of the party leadership will give a few red lines for the upcoming negotiations in the traffic light government. Economics Minister Habeck paints the situation in extremely bleak colors: He sees the planned conversion to a climate-neutral economy at risk, as well as the energy price brakes to relieve the burden on citizens – unless new money is raised. The SPD is also holding a party conference on the second weekend in December.

What is the next step? At the end of the expert hearing in the Budget Committee, Florian Toncar, the Parliamentary State Secretary in Lindner’s Finance Ministry, also spoke. The internal assessments have “of course” progressed, he says, and the expert hearing will now be included in the house’s analysis. They will then present their “own proposal” on how to proceed, “in time” before the Budget Committee’s final decision on the 2024 federal budget this Thursday.

However, Toncar cannot say exactly when. It’s not just the reviewers who will be excited.