Financial crisis in debt limit rule - Shocking development: SPD seeks extra session for financial matters
Following the surprising revelation from the government regarding taking on additional loans, the SPD party has requested a special parliament gathering scheduled for Thursday. State Minister President Hendrik Wuest (CDU) is expected to provide clarification during this session, according to SPD faction leader Jochen Ott (SPD).
Finance Minister Marcus Optendrenk (CDU) revealed to reporters on Wednesday that exceptions to the debt brake law would be utilized for an extra loan, citing the unfavorable tax outlook caused by the sluggish economy as the reasoning.
Ott dismisses this communication as "rock bottom" and an "ignorance of the parliament." Ott pondered if Optendrenk's decisions might not even breach the constitution, as the parliament would only learn of these details via the media rather than direct communication.
Ott specifically referred to Optendrenk's earlier statements to the "Rheinische Post" in late April, where Optendrenk asserted that there was "no legal room" for a debt-funded special fund: "We have a mild economic growth, but not a crisis situation," Optendrenk said. Ott observed that there had been a "180-degree turnaround."
Instead of pursuing the route previously discussed with the "Rheinische Post," Finance Minister Optendrenk plans to leverage the so-called conjuncture component, which is an element of the debt brake law. For this year, he intends to propose an additional budget.
The conjuncture component of the debt brake dictates that new loans are usually permitted during times of economic decline, albeit they must be repaid when the economy rebounds.
The state parliament's president must authorize and schedule the special parliament session. The FDP previously demanded an "immediate government response" from Wuest in the "Rheinische Post."
