Debate on suspending the debt brake for flood aid continues - Scholz pledges solidarity

Debate on suspending the debt brake for flood aid continues - Scholz pledges solidarity

SPD parliamentary group leader Mützenich referred to the option of suspending the debt brake, which is enshrined in the constitution. He told the digital media company Table.Media that the German government would be "well advised to openly address the question of whether the exemption under Article 115 should not also be applied to this event in addition to Ukraine and the Ahr Valley disaster". First of all, a damage assessment is necessary, said Mützenich. However, it was foreseeable that the additional funds for damage compensation, technical relief and disaster control, dyke renovations and the designation of new flooding areas would financially overburden the federal states and municipalities.

Corresponding demands to suspend the debt brake again for this purpose had already been voiced by the SPD parliamentary group on Wednesday. It was not "a question of doing the math, but also of the political will to make it clear that the federal government is prepared to help deal with the damage," said Mützenich. He also made it clear that the aid already promised for the Ahr Valley after the flood there in 2021 and the support for Ukraine would have to be financed with loans that were not subject to the debt brake.

On the sidelines of a visit to the badly affected district of Mansfeld-Südharz in Saxony-Anhalt,Scholz said that after the flood it would be necessary to see how extensive the damage was "and what that means". But one thing is clear: "This will only be possible together and must be done in a spirit of solidarity in Germany," said the Chancellor. The decision would then be discussed and made between the federal government and the federal states "when the time comes".

In the district of Mansfeld-Südharz, there are concerns about a dam bursting due to the flooding of the Helme. In several federal states in northern Germany, the emergency services have been battling the masses of water for days. There is no sign of the situation easing, at least not in the short term. On Wednesday, the German Weather Service extended its warning of continuous rain into Saturday in some cases.

The Greens were also open to suspending the debt brake due to the consequences of the floods. "The damage is immense and the people in the affected regions will be able to rely on our support," said Sven-Christian Kindler, budget policy spokesperson for the Green parliamentary group, in the Rheinische Post newspaper. Provisions will also have to be made for this in the 2024 federal budget. "In view of this, the declaration of an emergency situation for 2024 by the budget legislator naturally remains an option," said Kindler.

Fratzscher agreed with the proposal. The flood in parts of Germany will probably "make an exception to the debt brake necessary" for both the federal government and the state of Lower Saxony, the head of the German Institute for Economic Research (DIW) in Berlin told the "Tagesspiegel" (Thursday edition).

Fratzscher anticipates costs in the billions. This amount could not be covered by current budgets, he said. "The alternative to an exception to the debt brake would be even tougher austerity measures, which would further weaken the German economy in already difficult times and cost prosperity," warned the economist. "The flood disaster in Lower Saxony shows the nonsensical nature of the debt brake," wrote Fratzscher on X, formerly Twitter.

This was criticized by coalition partner FDP. General Secretary Bijan Djir-Sarai told the news portal t-online on Thursday that "of course" the affected areas would receive support. "But the SPD's maneuver to now call for a suspension of the debt brake is transparent," Djir-Sarai continued. "The floods, which are causing so many people in our country great concern, should not be exploited for their own political agenda."

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• Expected costs of flood aid trigger new debate on debt brake

1. More discussions surrounding suspending the debt brake for flood aid are ongoing, with Mützenich suggesting its application beyond Ukraine and the Ahr Valley disaster.
2. The German government, led by Olaf Scholz, is considering the potential exemption under Article 115 for flood aid, in addition to aid for Ukraine and the Ahr Valley.
3. Mützenich underscored the need for a comprehensive damage assessment, acknowledging the financial strain that additional funds for disaster relief and reconstruction would place on federal states and municipalities.
4. The SPD parliamentary group had previously advocated for suspending the debt brake to cover the costs of flood aid, stressing the importance of political will in addressing the damage.
5. In the flood-stricken district of Mansfeld-Südharz, Scholz emphasized the necessity of approaching the situation with solidarity and caution, ensuring a joint effort between the federal government and the federal states.
6. Northern Germany has been hit hard by the flooding, and emergency services have been working tirelessly for days to contain the excess water, with no immediate relief in sight.
7. Mützenich underscored the need to finance the already-promised aid for the Ahr Valley and support for Ukraine with loans exempt from the debt brake.
8. Fratzscher, head of the DIW, agrees with the proposal to suspend the debt brake for both the federal government and the state of Lower Saxony, citing expected costs in billions that cannot be covered by current budgets.
9. The FDP criticized the SPD's call for suspending the debt brake, arguing that the floods should not be exploited for political gain and instead warning of austerity measures that could further weaken the German economy.
10. Kindler, the Green parliamentary group's budget policy spokesperson, supports the suspension of the debt brake due to the floods, calling for provisions to be made in the 2024 federal budget and considering the declaration of an emergency situation for 2024.
11. In view of the immense damage caused by the floods, the Greens are prepared to offer their support to the affected regions.
12. The flood situation in Lower Saxony has highlighted the "nonsensical nature" of the debt brake, according to Fratzscher, who argued that tougher austerity measures would further weaken the German economy and cost prosperity.
13. Fratzscher called for an exception to the debt brake to address the flood disaster, maintaining that refusing to make an exception would lead to even more challenging austerity measures.
14. The costs expected from the flood aid have ignited a new debate on the debt brake, raising questions about its relevance and effectiveness in addressing unprecedented challenges such as massive natural disasters.

Source: www.stern.de