Finance Minister Bayaz insists on reform of the debt brake
Following the Constitutional Court's ruling on the budget, Finance Minister Danyal Bayaz has called for a reform of the debt brake. "We need an update for our debt rules if we want to invest in the future of the country, increase defense spending as promised, secure the restructuring of our energy supply in the long term and also pay off debts with rising interest rates," the Green politician told the German Press Agency on Wednesday.
Bayaz spoke out in favor of a federalism commission consisting of the federal and state governments, which should work with experts to develop reform options. An investment rule within the debt brake could prevent shadow budgets and enable necessary future investments from the core budget without a further sharp increase in consumer spending.
The Federal Constitutional Court had previously ruled on Wednesday that the federal government may not use funds intended to combat the coronavirus crisis for climate protection. The amendment to the supplementary budget 2021 is therefore unconstitutional. The CDU/CSU parliamentary group in the Bundestag has thus successfully filed a lawsuit against the reallocation. Due to the emergency situation during the coronavirus pandemic, the federal government had subsequently increased the 2021 budget by 60 billion euros in the form of a credit authorization. In such extraordinary situations, it is possible to take out loans despite the debt brake.
In the context of discussing debt management and investments, Finance Minister Bayaz suggested the formation of a federalism commission involving both the federal and state governments to explore reform options, including the possibility of an investment rule within the debt brake. To ensure fiscal sustainability in the long term, Bayaz emphasized the importance of reviewing the country's financial policies, considering factors such as defense spending, energy supply restructuring, and debt repayment with rising interest rates, which are all part of household and federal government finances.
Source: www.dpa.com
