Fiscal policy tension: On the one hand there is compliance with the debt brake according to the draft budget for 2024, on the other hand there is the unpredictable situation in Ukraine.
The traffic light coalition remains open to suspending the debt brake this year if greater support for Ukraine may become necessary.
He is firmly convinced that the legal framework for this exists, said SPD budget politician Dennis Rohde at the federal press conference in Berlin. Suspension would be possible under Article 115 of the Basic Law in the event of natural disasters or “extraordinary emergency situations”. The 2024 budget approved by the Bundestag’s budget committee stipulates that the debt rule of the Basic Law is adhered to.
Ukraine support more important than debt rules
“If there is war in Ukraine, then it can never be a normal situation in this country. (…) I think that the Ukrainian struggle for freedom should not fail in the end because of a conservative view of debt rules,” said Rohde. The political framework would now have made it possible not to have to identify the emergency situation. This is a political agreement, which also means that it will be discussed again if there are significant changes and Ukraine needs to be supported even more.
There are some “painful savings” in the 2024 federal budget, said the budget spokesman for the Green parliamentary group, Sven-Christian Kindler. But the budget provides social security. “There are no cuts in the welfare state. There are no general cuts in citizens’ benefits.”
The FDP budget politician Otto Fricke is pleased that it has been possible to accommodate tax relief of 15 billion euros in the budget. He also defended the reduction in federal subsidies to pension insurance. “Not a single pension will be cut by this budget.” It’s just about reducing the pension insurance reserve, which is not provided for by the law at this level.
Spending of around 476.8 billion euros
The Budget Committee approved the draft budget for 2024 in the so-called adjustment meeting on Thursday evening. The budget provides for expenditure of around 476.8 billion euros and new loans of around 39 billion. The debt brake is intended to be adhered to again after years of exceptions. The Bundestag and Bundesrat are due to make a final decision on the 2024 budget at the beginning of February.
Source: Stern
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