Fratzscher: Without a budget, the situation will escalate
For days, the leaders of the SPD, Greens and FDP have been trying to plug a 17 billion euro hole in next year's budget. Parts of the coalition consider an agreement this year to be out of the question. Top economist Fratzscher considers this to be a disaster.
Economist Marcel Fratzscher believes that the budget crisis must be ended as quickly as possible and a federal budget for 2024 adopted. "Otherwise the situation will escalate and could drive the German economy back into recession," said the President of the German Institute for Economic Research (DIW).
"The biggest problem today, both politically and economically, is not spending cuts or subsidies, but such a massive loss of confidence in politicians' ability to act that companies are canceling their investments or shifting them abroad," said Fratzscher. "Stability and keeping promises must now be the top priority for the German government."
Fratzscher spoke out in favor of a renewed suspension of the debt brake, as many in the SPD and the Greens also want. However, the FDP is very skeptical so far. "Declaring an emergency for 2024 and keeping all promises is by far the best way to avert even greater economic damage," said the economist. In the medium term, there are many opportunities to make savings, primarily in subsidies for fossil fuels of almost 60 billion euros a year, such as the privilege for diesel and aviation fuel. "In addition, tax privileges for inheritances, real estate and VAT should also be reduced."
Federal Chancellor Olaf Scholz and the two Vice Chancellors Robert Habeck and Christian Lindner have been struggling for days to find a way to plug a 17 billion euro hole in the budget for 2024. Among other things, it was caused by the budget ruling of the Federal Constitutional Court. The SPD parliamentary group leadership no longer believes that a Bundestag resolution on the 2024 budget is possible this year. The parliamentary secretary of the largest coalition parliamentary group, Katja Mast, expressed this view in a text message to her parliamentary group on Thursday, which was coordinated with parliamentary group leader Rolf Mützenich.
Read also:
- Year of climate records: extreme is the new normal
- Precautionary arrests show Islamist terror threat
- SPD rules out budget resolution before the end of the year
- Numerous oil, gas and coal lobbyists at climate conference
In light of the economic concerns, top economist Marcel Fratzscher proposes adopting a federal budget for 2024 as soon as possible to avoid further escalation, as per his view at the DIW. The current budget crisis, caused in part by the ruling of the Federal Constitutional Court, has led the SPD parliamentary group leadership to believe that a Bundestag resolution on the 2024 budget may not be achievable this year within the 'Traffic light coalition'.
Source: www.ntv.de
