Federal government borrowing has increased exorbitantly. According to Lindner, this should be the end of the coming year. For SPD leader Esken, however, this has not yet been decided. Is a coalition storm brewing?
The traffic light coalition is threatened with a dispute over future compliance with the debt brake and rapid further relief for citizens and companies in view of the high inflation.
With a view to possible new measures due to skyrocketing energy and food prices, SPD leader Saskia Esken questioned Finance Minister Christian Lindner’s (FDP) plan to comply with the debt brake from 2023. «The question of financing is legitimate and very serious. I’m telling you: we will have to talk about the debt brake or other ways of financing in the coalition,” she told the “Tagesspiegel”.
Lindner, on the other hand, confirmed on Sunday in the short message service Twitter: “We have to comply with the debt brake as soon as possible! That’s why I’m sticking to it in 2023.” You have to lead the state out of debt because the interest burden is increasing. “It requires very hard work and strong nerves.” Without mentioning Esken by name, he went on to write: “My impression is that not everyone in politics has yet understood that we are also experiencing an economic turning point that will keep us very busy.”
The debt brake enshrined in the Basic Law only permits minimal borrowing. In the past few years, it had been suspended because of the high loads caused by the corona pandemic and then by the war in Ukraine. The recently approved federal budget for 2022 provides for new borrowing of almost 139 billion euros. Lindner intends to present the draft budget for 2023 shortly.
Big jobs cost money
Esken emphasized that the European Union had also made it clear that it would be fundamentally wrong if the public budgets were to forgo investments in favor of the debt rules. “I share that view.” Tasks such as climate change, demographics or social cohesion did not take a break. “That’s why we have to look for ways to continue investing and to be able to finance our socio-political projects.”
With a view to the budgetary situation, Lindner dampened hopes of quick further relief for citizens and companies. He had read that the coalition wanted to make a decision before the summer break, he told the news portal t-online. “But there is little financial and legal leeway if we don’t save elsewhere. That must be taken into account in all proposals.”
Are further reliefs necessary?
However, the SPD and the Greens do not yet consider the aid packages that have been decided on for citizens and companies to be sufficient. Family Minister Lisa Paus assumes that further steps will be necessary as early as autumn. “All the data show that rising food and energy prices are particularly affecting poorer families,” said the Greens politician to the German Press Agency in Berlin. The federal government has already decided on two relief packages. “We will take a close look at how they work and advise on further steps. I’m assuming that we will find out in the fall that we need further relief for families.”
SPD faction leader Rolf Mützenich and Agriculture Minister Cem Özdemir (Greens) recently brought further relief into play.
Lindner now advised to let the previous measures take effect first. For example, a family of four has just been relieved of over 1,000 euros in some cases. “For the coming year I recommend new measures. The middle of our country deserves a tax break, especially the small and middle incomes. In view of the high inflation, we must above all prevent cold progression.”
The Minister of Finance was also reluctant to extend the energy price flat rate of 300 euros to pensioners, as demanded by the Union and social organizations. That would cost the federal and state governments 5.3 billion euros. “There are no reserves in the 2022 federal budget,” he emphasized. “Relief never fails because of the Free Democrats. But at the same time the federal government has reached its financial limit.”
