a minute agoState budget in Germany: Debt to the Family
Periskopi(4 years ago)
(4 years ago)In the last two years, Germany has made 545 billion euros in debt. But the war in Ukraine will be even more expensive for Germany. The Bundestag will soon receive mail from the federal government with its 2022 bill, which has long been outdated at key points. The bill envisions 99.7 billion euros of debt [...]
The Bundestag will soon receive mail from the federal government with its 2022 bill, which has long been outdated at key points. The draft envisions 99.7 billion euros in new debt. An unrealistic assumption. The Federal Finance Ministry knows that. Neither will the cost that Russia's invasion of Ukraine and the cost of the financial effects of rising energy prices and costs as a result of sanctions against Russia be involved in Germany. The figures include costs for humanitarian aid to Ukraine, but not the expenses expected for refugees leaving Ukraine and coming to Germany.
A <x0 base budget”, which the federal cabinet is expected to approve on Wednesday, 16.03.22, and then put on the parliamentary path. It envisions spending of 457.6 billion euros.
While Bundestag deals with this basic budget, which is expected to be valid by the end of June, the Finance Ministry has time to calculate further costs and to draft and hand over the so-called supplementary budget. Opposition CDU parties/ The CSU expects borrowing could reach the end of up to 150 billion euros, reports the DW.
100 billion extras for the military
The main budget does not include the 100 billion euros that Chancellor Olaf Scholz has promised to improve Bundeswehr over the coming years. The federal government has specifically set up a special fund for that purpose. That means the money will be collected on loans, but the special fund is not part of the annual budget and does not burden the debt quota.
A major uncertainty in the so-called basic budget is about calculating income, which depends on economic development. The Ministry of Finance has used economic projections from January, the pre-war era. Tax assessment is even older, it dates from November 2021. Unfortunately, the latest figures are not yet available, said briefly.
Financial Currency
Why does the Federal Minister of Finance present a budget that does not reflect real costs? Christian Lindner is under pressure. Because of the change of government in 2021, no budget was adopted for next year. As of January 1st, ministries, authorities and all institutions dependent on the federal budget have been working on a pro-visual budget. So they don't know how much to spend.
When Linder took over the Ministry of Finance in early December, he found a draft budget from his predecessor, current Chancellor Olaf Scholz, who was written before the wave of omicron broke out. There was an estimated 100 billion euros in new debt for 2022.
A credit limit Lindner, who is also party leader The FDP wanted to preserve it. When liberals were still in opposition, they strongly demanded that the state be less indebted. But that probably won't happen since 2022. The power supply is especially becoming more expensive. Gas and oil prices for heating continue to rise, and a litre of gasoline and oil now costs over two euros at gas stations.
Fuel station?
A subvention for heating for needy layers is included in the projects, and 1.5 billion are planned for gas reserves. But if prices continue to rise, it will not be enough. FDP politician Lindner also wants to facilitate automobile drivers and propose a temporary discount for fuel of ten cents per litre.
In the ruling SPD, Greens and FDP coalition, the proposal finds no support. Federal Minister of Economy calls for <x0) efficiency measures” and “stumble” to reduce consumption in general and propose a speed limit.
2023 Without a New Debt
There could also be discussions on the topic of curbing debt. By 2023, Christian Lindner and his FDP want to spend only as much as the state takes. Christian Lindner points out that this is not a “threat or political desire” on his part. This is reality. Voting the debt is in the constitution and I don't see that there would be an amended constitutional majority in Bundestag and Bundestras to tame it. ”
The Constitutional Law allows only one exception from curbing debt in emergencies. And we all want to hope that we will be spared an emergency like the one that prevailed during the coronary pandemic”, says Linder, who is only planning debts of 7.5 billion euros for 2023, this is exactly the amount the constitution allows. According to the ministry, to succeed in this, all expenses must be tested and strictly prioritised.
What else can the government afford?
In the preliminary financial planning for years to come, some projects agreed on in the coalition agreement, such as the introduction of parental assistance, basic child safety assistance, and care, are not found. According to the Ministry of Finance, you cannot easily enter into debt for all kinds of projects. Do coalition partners from other parties view things similarly?
There's already a lot of voices in the SPD. The left-wing calls for suspension of debt control in 2023 and rising taxes for the rich. But the FDP strictly refuses that. The only release made by the minister of finance concerns atonement for the debt accumulated in the coronary pandemic. Instead of starting in 2026, the date may be postponed until 2028 and then extended over 30 years.
