Before the coalition committee: More relief despite the debt brake?

Status: 06/22/2012 5:23 AM

In view of the sharp increase in prices in the traffic light coalition, calls for further relief are louder and louder. Meanwhile, the FDP insists on a return to the debt brake. Today the coalition commission meets.

Author: Martin Polansky, ARD Capital Studio

Finance Minister Christian Lindner of the FDP says it almost on every occasion these days – for example yesterday at BDI’s Industry Day: “What we need to achieve now is a return to the debt brake. our budgets take control. ”

The debt brake only allows the federal government a very small amount of net debt. But because of Corona, the debt brake was put on hold for three years – which has since allowed the federal government to incur record debt. If Lindner and the FDP get their way, it has to end next year. And the liberals put more pressure on their fundamental issue, the worse they fare in the polls – as the smallest partner in the traffic light coalition.

Further relief required

At the same time, the voices of the SPD and the Greens in front of today’s coalition commission are getting louder in the face of high inflation, to bring citizens further relief along the way. For example, to raise the standard Hartz IV rates due to price increases. SPD leader Lars Klingbeil underlines: “I think it is absolutely clear that the standard rates need to be raised. Because prices are rising everywhere ”. According to Klingbeil, signaling parties have shown in two coalition committees that they can find solutions that benefit citizens.

Britta Haßelmann, the leader of the Greens’ parliamentary party, sees it in a very similar way. When it comes to basic security, the coalition must come to an agreement. “People who are suffering a lot and cannot compensate need more support,” says Hasselmann.

Criticism of the debt brake

More support means more government spending. The debt brake is also under pressure. Green leader Ricarda Lang has just emphasized that it shouldn’t be about keeping the debt brake no matter what. Rather, one has to face the challenges of time.

The federal government has already decided on two aid packages – worth almost EUR 30 billion. Some of them haven’t even hit people’s wallets yet. At the end of the EEG surcharge from July, EUR 300 energy money for employees, EUR 200 one-time payment for recipients of social benefits, EUR 100 bonus per child. On the other hand, from the beginning of June, there were two measures in place each month: a discount on a tank and a ticket for nine euros.

Oliver Holtemöller from the Institute of Economic Research Leibniz in Halle views both indicators quite negatively – because the wrong people will also benefit from them: “Both the tank discount and the € 9 ticket are very imprecise, non-specific instruments. They also have unfavorable distribution effects, ”says Holtemöller. He sees many disadvantages, but hardly any advantages. “It would be advisable not to extend these instruments under any circumstances. In fact, they must be stopped immediately. ‘

“Someone has to bear these costs now”

But there is no doubt about it. Rather, the Greens are considering an extension of the ticket for 9 euros, which would mean additional expenses. On the other hand, there are also proposals for reductions that would reduce tax revenues. For example, reducing VAT on certain food products as the Greens are entering the game. Or adjust your income tax rates to inflation to counteract the so-called cold progression. The FDP is pushing for it.

From the point of view of the economist Holtemöller, it is now a question of prioritization. Further concentrated aid is possible even in the event of a debt brake – if savings are made elsewhere. According to Holtemöller, it is now about making a decision about extra help for certain sections of the population. “But that means other parts have to bear more weight. The time when gifts were promised to all sections of the population is definitely the end. ” And the economist emphasizes: “German society has generally become impoverished as a result of rising energy prices. Someone has to pay these costs now.

The aid package III is not yet to be expected

In the run-up to the coalition committee meeting, the ruling parties said that the situation should first be assessed tonight and that no third bailout should be expected yet. Since the budget for 2023 is already being prepared in parallel, the draft budget is to be adopted in the federal cabinet on July 1 – keeping the debt brake if possible.

On July 4, the federal government, business and trade unions want to meet for the first time for the so-called joint action. The aim is to investigate what the state and collective bargaining partners can do to prevent a wage and price spiral in the face of high inflation. Possible scenario: Trade unions apply wage restraints as the state cushions social hardship, which in turn puts a strain on the federal budget.

Then, from September, there will be budget deliberations in the Bundestag. In doing so, they want to concretely determine whether further aid measures will be budgeted. And how can they be financed when in doubt. Whether the debt brake will be re-applied from 2023 should therefore be decided only in the fall – also depending on how the economic situation develops by then.

Leave a Comment