Finances - Addressing Budget Issues: CDU/CSU Raises Concerns
The CDU/CSU party has expressed apprehensions over the traffic light government's supplementary budget for this year, with parts of the budget still relying on an outdated accounting system. Mathias Middelberg, the CDU's deputy group leader in the Bundestag, emphasized these concerns, stating, "And that's why constitutional concerns remain about the supplementary budget today."
Despite these reservations, the supplementary budget is scheduled for adoption today in the Bundestag. The Federal Audit Office shares similar concerns regarding the budget, particularly in regards to the timing of when loans should be included in the government's debt calculation.
Middelberg also voiced criticism towards the agreement reached by the traffic light coalition for the 2024 financial year, characterizing it as an inadequate compromise for the nation. The agreement functions as a support package for the traffic light government, but Middelberg regarded it merely as a patchwork to mend inner coalition rifts.
Middelberg highlighted the need for the introduction of climate money outlined in the coalition agreement, asserting that this would simultaneously serve as a crucial step towards income equality in the country. The traffic light coalition intended for climate money to act as social compensation for heightened climate protection burdens affecting citizens, yet implementation has yet to commence.
Two prominent political figures, Baden-Württemberg's Finance Minister Daniel Bayaz (Greens) and Berlin's Senator for Finance Stefan Evers (CDU), have advocated for the establishment of a reform commission for the debt brake. The proposed commission includes representatives from academia, federal, and state governments, aiming to further develop the debt brake policies.
Bayaz and Evers believe that an investment rule could be a viable component of the debt brake reform. This rule would enable credit financing for additional investments, potentially addressing challenges in the transformation sector. They caution against overextending this new exception, warning against creating additional leeway for non-targeted expenditures by politicizing the investment concept.
Middelberg supports the call for a debate on the debt brake reform, recognizing the need for more flexibility in managing financial matters at the federal state level.
Further Considerations
The budget chaos at the federal level has prompted growing debate regarding the debt brake reform. Some federal states have even considered launching a reform initiative in the Bundesrat. Kai Wegner, Berlin's governing mayor and CDU member, discussed this concept on RBB-Inforadio.
The need to find a balance between fiscal responsibility and investing in critical areas remains at the forefront of the debate.
Relevant Insights
- The "traffic light coalition" government, comprising the Social Democrats (SPD), Alliance 90/The Greens, and the Free Democrats (FDP), collapsed in November 2024 due to a dispute over budget and economic policy.
- Article 115 of the Basic Law stipulates that revenues and expenditures should be balanced without borrowing, except in emergency situations. The current debt brake rule limits the federal government's permissible annual structural deficit to 0.35% of GDP.
- Various parties advocate for fiscal flexibility, citing the need for investments in infrastructure, climate change, and defense. However, maintaining fiscal responsibility and adhering to constitutional rules remain important considerations.
- Public opinion on the debt brake has shifted, with a recent survey indicating that 55% of Germans are in favor of reforming or abolishing the debt brake, while only 42% want to keep it unchanged.
- The outcome of the upcoming federal election on February 23, 2025, will be critical in determining the future of the debt brake and fiscal policies in Germany.
