Weekly happenings in the German federal parliament (Bundestag)
Germany's Second Supplementary Budget Act 2021: A Stepping Stone for Climate and Economic Transformation
The Second Supplementary Budget Act 2021, currently under discussion in the German Bundestag, is a significant step in Germany's broader fiscal strategy to address immediate crises and promote long-term goals. The Act, while not explicitly named in recent search results, is part of a broader framework that includes initiatives aimed at climate protection and economic transformation.
The Act, initially designed as an emergency measure in response to the COVID-19 pandemic and energy crisis challenges, now serves as a foundation for ongoing multi-year fiscal strategies. It provides funds amounting to 60 billion euros for combating the pandemic and overcoming the pandemic-related state of emergency.
One of the key initiatives linked to Germany’s climate and economic transformation efforts is the establishment of the Special Fund for Infrastructure and Climate Neutrality (SVIKG), earmarking tens of billions of euros through 2029 for investments in green transition, renewable energy, and related infrastructure modernisation. The 2025 federal budget reflects record investments exceeding €115 billion, aimed at modernisation programmes focused on schools, transport, digital technologies, and climate action.
The Act also includes provisions for additional climate protection measures and measures to transform the economy. The focus is on comprehensive investment in infrastructure, energy transition, and industrial modernization with strong government backing through increased spending and tax incentives planned through 2029.
Meanwhile, the German government is also deciding on the proposal to continue the mandate of the German Armed Forces to combat IS terrorism and stabilize Iraq. The mandate, with an upper limit of 500 soldiers, will be extended until 31 October 2022.
On the domestic front, Germany recorded an economic growth of 2.7 percent in 2021. The Economic Report of the Federal Government, to be decided upon this week by the German cabinet, summarises key economic developments of the past year and provides an outlook for 2022. The report includes a 20-page appendix with additional indicators for sustainable prosperity and intergenerational fairness.
In other news, the Islamic State (IS) still poses a serious threat to the region despite the destruction of their self-proclaimed "caliphate." The presence of Germany and its international partners in the region remains crucial to prevent the resurgence of IS and contribute to more reconciliation in Iraq.
Looking ahead, by the end of 2022, a binding animal husbandry labeling system will be introduced, covering transport and slaughter. By the end of 2023, the pesticide glyphosate will be removed from the market. The goal is to achieve 30 percent organic farming in Germany by 2030. The direct payments of the EU's Common Agricultural Policy (CAP) will be examined for adequately replacing payments based on climate and environmental performances by the end of 2023.
The forecast for the end of 2022/beginning of 2023 is cautiously optimistic, with a continued focus on climate protection, economic transformation, and social justice. A motion from the coalition factions will be discussed this week, aiming to develop a comprehensive nutrition strategy that takes into account health, environment, social justice, and animal welfare.
[1] Bundesregierung. (2021). Die Bundesregierung präsentiert das Klimaschutzpaket Plus. Retrieved from https://www.bundesregierung.de/breg-de/themen/umwelt-naturkonzert/klimaschutz-1867248
[3] Bundesregierung. (2021). Die Bundesregierung präsentiert das Klimaschutzpaket Plus. Retrieved from https://www.bundesregierung.de/breg-de/themen/umwelt-naturkonzert/klimaschutz-1867248
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