2021 budget firm
‘Giant slap’ at traffic lights: Union welcomes budget verdict – harsh criticism from environmentalists
Despite the debt brake, the 2021 federal budget was increased by 60 billion euros – the money went to climate protection. Karlsruhe now declares the move unconstitutional. Reactions to this are mixed.
The Federal Constitutional Court has ruled that the federal government cannot use funds intended to fight the coronavirus crisis for climate protection. The change to the supplementary budget for 2021 is unconstitutional, the German Supreme Court announced in Karlsruhe on Wednesday. The effectiveness of the debt brake is at stake, said Second Senate President Doris König at the announcement. The trade union faction in the Bundestag successfully sued against the redistribution. (Ref. 2 BvF 1/22)
The government factions in the Bundestag are prepared for the scenario, said SPD parliamentary group director Katja Mast. He initially sees no direct impact on the 2024 federal budget schedule. “At this point I assume that we will approve the budget on December 1 anyway and that the housekeeping meeting will take place as normal tomorrow.” At this meeting, the Budget Committee will make final changes to the 2024 budget.
Reactions to the ruling are mixed. While the Union is pleased with the news from Karlsruhe, climate and environmental activists express massive criticism.
“Relief” and harsh criticism of the financial maneuver from Karlsruhe
CSU regional group leader Alexander Dobrindt sees the ruling as a “giant slap in the face” for the traffic light coalition. “The traffic lights blow up their dubious budget policy,” Dobrindt told the newspapers of the Bavarian media group. The government took “billions it shouldn’t have touched to finance its left-wing castles in the air,” Dobrindt further criticized.
The Court has now put an end to its “cheating policy”, CSU general secretary Martin Huber told newspapers. Huber warned that the whole traffic light budget planning is no longer applicable. “Whoever is not able to draw up a budget that complies with the Constitution is not able to govern. The traffic light has failed across the board”, continued the CSU politician.
The Union’s parliamentary secretary, Thorsten Frei (CDU), expressed his relief at the sentence. “Karlsruhe joins the procession at the traffic lights,” Frei told “Spiegel”. “If the ‘traffic light’ had gotten away with its bypass maneuver, it would have caused serious damage to the financial system,” he added.
However, massive criticism comes from climate and environmental organizations. According to the environmental organization Greenpeace, the ruling represents a “serious setback for climate protection”. “Now the fact that the traffic light wanted to pay for the climate-neutral restructuring of the economy with financial policy sleights of hand is now taking its revenge,” complained Greenpeace Germany CEO Martin Kaiser. Loans, new taxes and reductions in climate-damaging subsidies should no longer be taboo.
Kaiser called on Chancellor Olaf Scholz (SPD) to use his political authority in the face of the climate crisis. “Because we are already in the midst of the climate crisis. Loans, new taxes and dismantling climate-damaging subsidies must not be taboo.” The budget needs a better balance between military spending and greater climate protection, as well as new socio-ecological tools in financial policy.
Professional choice between money and meaning
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“Wirtschaftsweiser”: limitation of possible damage
For Norbert Walter-Borjans the sentence demonstrates “the extreme flaw in the design of the debt brake”. The former SPD leader and former NRW finance minister told Spiegel: “It is a brake on the future because it prevents necessary investments. If the government tries to bypass this problem through the back door, the budget situation becomes confusing “. Karlsruhe now provides clarification, the ruling calls for clean regulation. “The government needs to clean up here,” Walter-Borjans said.
But even the “economic sage” Achim Truger sees opportunities here to limit the damage. “The ruling is a blow to the federal government. The climate and transformation fund must be cut by 60 billion euros,” said socio-economist Truger of the German Press Agency. “But there are still pragmatic ways to limit the damage.”
The cleanest and most fundamental solution is a reform of the debt brake. “It could, for example, be established that after a crisis we should only gradually return to the debt rule,” Truger suggested. It is also possible to continue to rely on the debt brake exception rule and declare a state of emergency for several years as domestic economies continue to be affected. Alternatively, Truger suggested compensating for the lack of revenue in the budget through a temporary energy or climate solidarity measure.
The emergency money was converted into climate funds
Due to the emergency situation during the coronavirus pandemic, the federal government subsequently increased the 2021 budget by 60 billion euros in the form of a borrowing authorization. In such exceptional situations it is possible to borrow despite the debt brake.
In the end, the money was not needed to address the pandemic and its consequences. The federal government consisting of the SPD, the Greens and the FDP then wanted to use the money for the so-called climate and transformation fund and, with the approval of the Bundestag, redistributed it retroactively in 2022. 197 deputies of the Union parliamentary group in the Bundestag they filed a lawsuit against Karlsruhe because, in their opinion, the debt brake was circumvented in this way.