Household - Klingbeil open to credit-financed special fund
In the household dispute of the Traffic Light Coalition, the SPD continues to push for more opportunities for new debt. SPD party leader Lars Klingbeil made it clear that his party could propose a credit-financed special fund for investments instead of suspending the debt brake.
"First, all ministries must look at where they can save. It's clear that we can't cut 30 to 40 billion euros from the core budget," Klingbeil told the "Süddeutsche Zeitung." He expected that now all possibilities would be discussed "objectively." "The BDI has just proposed a special fund for investments. The SPD is ready to talk about it."
The German Industry Federation (BDI) had complained about a massive investment backlog in Germany and proposed billion-euro special funds - that is, credit-financed extra taps in addition to the federal budget and outside the debt brake.
Bickering over the budget
The Traffic Light Coalition of SPD, Greens, and FDP has been arguing for months about a budget for the coming year. A two-digit billion deficit in the budget plan must be stopped. FDP Finance Minister Christian Lindner insists on maintaining the debt brake - from the SPD there has been growing pressure lately to use an exceptional regulation and suspend it. Lindner had also rejected the BDI's proposal for special funds.
"If we now set the right impulses with the budget, then we will see normal growth next year," argued Klingbeil. "If we now compress and create new uncertainty, that will be rejected. That can't be in the interest of the FDP Finance Minister either." And that we have an exceptional situation with the war in Ukraine, no one can deny. According to the Basic Law, the debt brake - that is, the upper limit for credits in the federal budget - can be suspended in exceptional situations.
- The debate over the budget in the Traffic Light Coalition has led to a push from the SPD to explore options for bypassing the debt brake, as proposed by Lars Klingbeil.
- In response to the SPD's proposal, Christian Lindner, the FDP Finance Minister, reiterated his commitment to maintaining the debt brake, citing its importance for financial stability in Germany.
- The German Industry Federation (BDI) has joined the discussion, proposing billion-euro special funds for investments to address Germany's investment backlog, suggesting a possible compromise between the SPD and FDP.
- The Coalition's budget dispute has been ongoing for several months, with the SPD and Greens advocating for more spending, and the FDP emphasizing the need to adhere to the debt brake.
- Klingbeil argued that investing now could stimulate growth, while Lindner warned of creating uncertainty and potential harm to the economy if the debt brake is suspended.
- The SPD leader, Klingbeil, pointed out that the current situation in Ukraine constitutes an exceptional circumstance, as per the German Basic Law, which governs the suspension of the debt brake in extraordinary situations.
- Despite pressure from the SPD, FDP Finance Minister Lindner has so far maintained his position, stressing the importance of adhering to the debt brake to preserve financial stability in Germany.
