Social coalition – traffic lights are arguing over the debt brake – the economy

Berlin (dpa) – After Chancellor Olaf Scholz (SPD) announced further reductions for energy consumers, the coalition argues over how to deal with the debt brake. Labor Minister Hubertus Heil makes the planned return to the debt brake from 2023 dependent on the economic situation. “If we fall into a mass recession, the coalition needs to reconsider whether the debt brake should be respected,” said an SPD politician from the OM media group. The Greens also have doubts about the return to the debt brake.

On the other hand, the FDP wants to stick to it. “Solid state finances, no lending policy and reduced government spending help fight inflation,” Finance Minister Christian Lindner (FDP) told the Funke media group newspaper. “We can no longer afford increasing debt in terms of interest costs.”

Scholz announced a rescue package on Friday for the fallen energy concern Uniper, which will further increase energy costs for consumers. At the same time, the SPD politician stretched out the prospect of further relief for citizens in early 2023. Regarding the question of whether the debt brake should still be respected in such a case, he said: “Incidentally, given the issues we are discussing here, we assume that we have the funding freedom to do so.”

It is possible to suspend the debt limit

The debt brake, envisaged in the Basic Law since 2011, is designed to ensure that the federal and state budgets are done without loan income. For the federal government, net debt is limited to 0.35 percent of gross domestic product. In “extraordinary emergencies”, however, the Bundestag may suspend the debt brake, as it did in 2021 and 2022 due to the corona crisis.

Heil pointed to this exception. “We don’t know what will happen in the next few weeks. I will mention the Russian gas embargo here, ”he said. In that case, there may be a “need to discuss it again” situation. Katharina Beck, spokesman for the financial policy of the Greens in the Bundestag, also refers to the exception rule. In her opinion, “it is” more and more reminiscent of an extraordinary emergency, “she told Bild (Saturday).

The FDP, on the other hand, sees no room for discussion. “The debt brake in our constitution creates a firewall against rising inflation and credit costs,” said Secretary General Bijan Djir-Sarai. “Instead of constantly questioning this protective function, I advise the Federal Labor Minister to consider carefully what savings potential he sees in his own projects.”

Lindner wants to curb creeping tax increases

Meanwhile, Finance Minister Lindner announced that at the beginning of next year he intends to reduce the so-called cold tax progression. In the near future he will present a proposal “how we should increase the basic tax relief on January 1 and what the new income tax and payroll tax tariff should look like” – said the FDP chairman.

“Cold Progression” refers to some kind of creeping tax increase, for example, when a wage increase is completely eaten up by inflation but still leads to higher taxes.

The Union called for assistance to citizens to be limited to those who really need it. “You have to look very carefully where those who are suffering en masse from these price increases are. We need targeted help there, ”said the first parliamentary director of the CDU / CSU parliamentary group, Thorsten Frei of dpa. “The circle must be tight.”

The previous packages were “basically shot with a shotgun or – if you want to capture less combat – distributed with a watering can” – criticized Frei. “This means that many for whom this price development is irritating but not existential has benefited.” Measures such as a € 9 ticket or a fuel discount for all drivers should no longer exist.

© dpa-infocom, dpa: 220723-99-125879 / 3

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