Finance: Lindner wants a small reform of the debt brake

Suspending the debt brake is also very controversial at traffic lights. Now the Minister of Finance is commenting on a possible partial reform. The Union faction warns against new financial tricks.

Berlin (dpa) – Federal Minister of Finance Christian Lindner (FDP) continues to reject the fundamental reform of the debt brake, as demanded by the SPD and the Greens – but not partial reform. He wants to deal with it next year. The amount of possible debt should be linked to economic fluctuations more than before. Some EU prime ministers also want general changes in the mechanism for limiting national debt. They want to allow for more investment that will pay off later. Others in the Union are against it – now Schleswig-Holstein Prime Minister Daniel Günther has joined them.

Lindner told the editorial network Germany, a revision of the calculation of the so-called economic component is planned, which allows greater freedom in the event of a downturn. But that has nothing to do with the current one Householdthe situation of the federal government. “The intention is to update the calculation to the current state
economic research that will change the range of fluctuations,” he explained. “But that doesn’t increase the possible debt over a few years. Because more space in the slump is collected in the upswing,” said Lindner. He wants to tackle the reform in 2024.

The Union is reluctant to make the debt brake more flexible

Vice-Chairman of the Union Parliamentary Club Mathias Middelberg (CDU) expressed skepticism about adapting the debt brake to economic fluctuations. “The debt brake is no longer rigid, but has two components of flexibility, one structural and one cyclical,” he told the German Press Agency in Berlin. These two components already allow, for example, a constitutionally compliant new debt of more than 20 billion euros by 2024. “We are therefore extremely cautious about further flexibilization of the debt brake,” the budget expert said. “There must be no new trick to get around this basic rule.

Could the coalition decide on the adjustment itself?

The debt brake enshrined in the Basic Law has come under criticism after the chaos in the federal budget, as it only provides some room for borrowing. The major reform demanded by the SPD and the Greens requires a two-thirds majority in both the Bundestag and the Bundesrat. The FDP and a large part of the Union are against it. According to the RND, no amendment to the basic law is necessary to adjust the economic component. A majority of the traffic light coalition is enough, because it would only be necessary to modify the implementing laws for the debt brake.

What would be the case for major reform?

“I think that investing in the future is absolutely necessary,” Berlin Governor Kai Wegner (CDU) told dpa. “Neither Berlin, nor other Länder, nor the federal government can manage this from the budget.” Investments and renovations in transportation roads, bridges, schools, police and fire stations are huge because many things are subject to wear and tear. It is also about settling companies, especially in East Germany – and keeping those companies. In addition, Wegner faces enormous challenges, for example in the field of climate protection or housing construction.

And what do the naysayers say?

They also include the chairman of the CDU and the leader of the union faction Friedrich Merz, who had already reprimanded Wegner for his position. Schleswig-Holstein Prime Minister Günther sees it as Merz does. “Nothing gets better if you go into debt because of the debt and pass the burden on to the next generation,” he told DPA. “We must not consistently spend more money than we earn.” And he added: “I think the debt brake is right and so is the current regulation.”

Why did the discussion arise?

In mid-November, based on a lawsuit by an EU parliamentary group, the Federal Constitutional Court declared the redistribution of 60 billion euros in the 2021 budget to the climate and transformation fund to be invalid. The justices also ruled that the federal government cannot set aside emergency loans for later years. This created billion-dollar holes in the federal budget, the financing of which the traffic light coalition of the SPD, the Greens and the FDP was only able to agree on this week after weeks of disputes.

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