Is the end of traffic lights near?
The Federal Constitutional Court has illuminated the ideological rifts in the traffic lights. That's a good thing! The coming year will be an acid test for the coalition.
Christian Lindner does not like the word "debt brake", nor the word "emergency situation", and "suspension" is certainly not an option for a full-time starter. The Federal Minister of Finance therefore performed a rhetorical feat on Thursday evening: he appeared before the press and confessed that he would suspend the debt brake for 2023 due to the current emergency situation - but did not use any of these words. He then ended his appearance with the feel-good phrase that he wanted to "wipe the slate clean". The clean slate really is looming. But to everyone!
"Suspending the debt brake" - that always sounds so liberating! It's as if the debt brake has a huge switch and when a government is a little tight, it simply presses it, then the budgetary brake shoes lift off the rims and you really speed off, at the finish line everyone throws their arms up in the air and sprays each other with champagne. However, the suspension of the debt brake is at best an error in language and at worst a manipulation of the public.
"Only open in the event of a natural disaster!"
The debt brake is a hard, constitutional limit on new borrowing. It is set out in Article 115 of the Basic Law and is by no means an instrument from calmer times, as the Greens are now saying, but a reaction to a crisis: namely the global financial crisis. In practice, it cannot be "suspended" unless the suspension is written into the same document as the brake itself. This has only happened in one case, namely with the "turnaround" billions for the Bundeswehr. With the votes of the CDU/CSU, the traffic light government simply wrote the following into the Basic Law: 100 billion for defense, the debt brake does not apply here.
What Lindner is now announcing is something else: there is a tiny little door built into the debt brake. This little door reads in bright red letters "Hands off!" and "Only open in the event of a natural disaster!" or in "extraordinary emergency situations that are beyond the control of the state". The finance minister is now pushing the 2023 budget through this little door.
So there is no switch, no suspension, there are only hardships, necessities and anxious hopes that it will all hold up under constitutional law. Because you first have to find an "emergency situation", otherwise this week's debacle will be repeated: the Federal Constitutional Court will then slam the door shut once again and the next budget will also burst. The fact that the parliamentary managing director of the CDU/CSU parliamentary group, Thorsten Frei, called the "suspension" of the debt brake risky on Deutschlandfunk radio is probably not just a tactic, but a legitimate concern.
There's another bomb on the table
60 billion from the Climate and Transformation Fund (CTF) is currently missing because the money was intended for coronavirus and has been reallocated to climate policy. Up to 200 billion more are on the table because another fund, the Economic Stabilization Fund (WSF), is also outside the budget - experts are still arguing about exactly how much. What "emergency situation" is helping here? The Russian invasion of Ukraine? Stomach tightening at the Federal Minister of Economics? The spending diarrhea of the traffic light? The gloomy economy? Or, particularly creatively, the Federal Constitutional Court ruling itself?
Karlsruhe has not only blown up a budget, but has also put another ticking bomb on the table. The danger lies in one of the judges' key arguments. They argued that the further back an emergency situation was, the less a government could use it to argue against the debt brake. The very wording of the debt brake actually shows this: an emergency "situation" is something temporary. You can't be constantly on alert.
None of this would be so bad if the traffic light parties were not so far apart on economic issues. The Karlsruhe ruling has shone a floodlight on the ideological rifts in the traffic lights. Three parties are now looking each other in the tired eyes and asking themselves: Who are you and why am I in a coalition with you?
Perhaps Scholz should ask Habeck
The FDP loves a lean state, the SPD loves redistribution, the Greens love subsidies. Raising taxes, cutting back on social spending and renouncing climate subsidies is difficult.
The cobbling together of funds to the tune of tens of billions was a symptom of this wedged relationship - although economists such as Lars Feld and Marcel Fratzscher also advocated paying for investments over the years with emergency corona money. This was particularly practical, they wrote, because the money could be accessed flexibly and over the years. At this point at the latest, the question should have arisen as to what this has to do with the coronavirus crisis.
Now a new, plausible emergency story has to be found. Maybe Lindner will ask Robert Habeck: No one is as good at telling stories as he is, especially as he doesn't have to share the stage with anyone - as in every crisis, the eremitic chancellor is not on show until further notice, and his appearance today is not live, but a recording. Habeck said on Thursday, roaring, visually powerful: "We Germans have voluntarily tied our hands behind our backs and are going into a boxing match, while the others are tying horseshoes around their hands. The debt brake is a relic from times when China was just an extended workbench.
And now the grand coalition?
Meanwhile, his office manager is casting fiery glances in the direction of the CDU/CSU on LinkedIn: "Couldn't we now relax the debt brake together with an investment rule? This is a politically and humanly foolhardy idea, as Habeck recently accused the CDU and Friedrich Merz of having caused higher prices for people by filing a lawsuit with the Federal Constitutional Court. This was widely seen as sheer impertinence, but was not atypical: Habeck is thin-skinned. He can't stand it when someone shows him his limits.
The CDU/CSU is also not currently courting Green partners. Some prefer to talk about a new grand coalition, which would have the advantage that Olaf Scholz could look for a job without stage duties - then you wouldn't see him rolling his eyes again because of the terribly stupid people.
So is the end of the traffic lights near? Some observers see the FDP as the most likely breaking point. A small storm of protest is currently building up in its ranks against remaining in the traffic light. This is another reason why the party cannot afford any compromises on the debt brake or higher taxes. However, it can hardly throw in the towel either: after all, its leader is responsible for the budget debacle and he certainly does not want to deepen the image of the shirker that emerged after the collapse of the Jamaica negotiations.
The traffic light coalition is therefore condemned to compromises that will push each of the parties to the brink of self-abandonment. 2024 could be the year of internal party rebellions. It could be a good year for Friedrich Merz and the CDU/CSU.
Olaf Scholz, the German Chancellor, and Robert Habeck, the Green Party leader, have opposing views on the budget policy, with Scholz supporting compromises and Habeck advocating for stronger climate subsidies. This ideological divide was highlighted during the debate over the debt brake suspension.
The Federal Constitutional Court has played a significant role in the budget policy debates, with its rulings often influencing the actions of the government and the opposition. In a recent case, the court ruled that the suspension of the debt brake for emergency situations must be closely tied to the event causing the emergency.
Friedrich Merz, a former leader of the CDU/CSU, has recently criticized the Green Party for their stance on the budget and the debt brake. He has suggested that the CDU/CSU might consider forming a grand coalition with the CDU/CSU if the traffic light coalition continues to struggle with these issues.
Source: www.ntv.de
