War bonds would be a dangerous path for the traffic lights

War bonds would be a dangerous path for the traffic lights

In the absence of alternative financing ideas for climate projects, the SPD and Greens want to use the war in Ukraine to justify new billion-euro loans. This is constitutionally risky - and also unwise. The traffic lights are well on the way to highlighting their own lack of planning in the struggle with Russia.

The traffic lights are still looking for a solution to set up a constitutional budget for 2024, which is why the SPD and Greens have been calling ever more loudly for days for the debt brake to be suspended again next year. This time, the emergency situation is to be justified by the costs of the war in Ukraine. Not with the effects of the war on prices and security of supply for electricity and heating, as the coalition did in 2022 and 2023 with the Economic Stabilization Fund, but with the military aid and budget subsidies for Ukraine as well as the citizens' allowance that around one million Ukrainian refugees are currently receiving. The Federal Republic is therefore supposed to take out loans to finance its indirect participation in the war and solidarity with the victims of this war. It would be a new kind of war bond - and the Ampel would be taking a highly dangerous course.

It starts with the fact that the Federal Government would not be taking a secure constitutional path. Whether the war, which has been raging for almost two years now, is beyond the control of the state, similar to a natural disaster, the prerequisite for suspending the debt crisis, would have to be discussed. Even more difficult, however, is the fact that following the ruling of the Federal Constitutional Court, the Federal Government must demonstrate whether the instruments used to date to combat an emergency are suitable for combating the consequences of the disaster - and the longer ago the disaster began, the better the justification. The Russian invasion took place almost two years ago - and preceded the annexation of Crimea and the war in Donbass by seven years.

Ukraine as a scapegoat for the budget conflict

If not in court, then at least before parliament and the public, the government would have to demonstrate in detail that its current strategy is the most suitable means of resolving the crisis - i.e. pacifying the conflict. It is unlikely that Karlsruhe will get involved in military policy debates, but a possible legal challenge by the Union would at least lead to a review of whether the emergency justification formally complies with the requirements of the latest ruling from Karlsruhe. These are not insignificant uncertainties for a federal government that, according to its own statements, wants above all to introduce a proper budget, albeit conceivably late.

The question also arises as to whether what the SPD and Greens consider to be legal is legitimate. Until the debt brake ruling, the coalition was of the opinion that it could finance its support for Ukraine and its citizens who had fled to Germany from the regular budget. Now that the tripartite alliance has been prohibited from reallocating a loan that was devised by then Federal Finance Minister Olaf Scholz before the Russian invasion and projects from the slashed climate transformation fund have to be financed from money that is actually available, is Germany suddenly supposed to be overburdened with the costs of the war?

It's more like this: the German government is obliged - also by Karlsruhe - to meet the climate targets, but cannot make the necessary investments from its (record) revenues because it cannot or does not want to make substantial cuts anywhere else in its huge budget. Even a reform of the debt brake or another special fund are not possible without the FDP and CDU/CSU. So the SPD and the Greens want to circumvent the debt brake again, but this time legally, and are dragging Ukraine into their budget crisis as a result. This is politically extremely unwise.

Billions in debt for war with no foreseeable end

Government debt for investments is usually accepted across party lines because it can create value for the future in line with the principle of real estate loans. Externalizing the costs of war in loans, on the other hand, and burdening future generations with the price of this act of defence policy, does not follow any compelling logic. If the aim were to directly protect Germany's territorial integrity and the integrity of its inhabitants, war loans of this kind would certainly be justifiable. Germany's involvement in the Ukraine war, on the other hand, is based on security policy considerations, not an acute threat to the Federal Republic. It is safer than it has been for a long time from a conventional attack by Russia. It is therefore questionable to burden future federal governments and the population with the financial costs of these political decisions for decades to come - especially in view of the developments in Ukraine.

Never in the past year and a half have the prospects of a reasonably mild end to the fighting for Kiev been as out of reach as they are now. Ukraine is gradually running out of material and psychological fighting power. Its international support is waning and none of these signals are encouraging Russia to enter into negotiations on a ceasefire - on the contrary. The war could go on for many years without the danger of further destabilization of Europe by Russia being permanently minimized. Cynically speaking: From a fiscal point of view, the billions in loans, such as those the SPD and Greens want to take out, will foreseeably only prolong the emergency situation cited as justification, not end it. As things stand today, the German government could only end the war by not providing aid or by substantially increasing it.

And in this situation of all situations, citizens are supposed to approve loans in the double-digit billions - possibly year after year until the ruler in the Kremlin loses his appetite for war? This is a highly risky strategy, especially as Ukraine policy is being dragged into the center of already charged distribution debates because savings elsewhere are supposedly not possible. The Ampel would risk a further decline in support for Germany's arms and budget aid for Ukraine. In December 2023, the German government lacks a sustainable, long-term and comprehensible strategy for both the financing of its climate protection projects and its support for Ukraine. However, linking their helplessness on both issues is the worst possible answer that the traffic light could give in this existential crisis.

1. Despite the SPD and Greens' proposal to use the war in Ukraine as justification for new loans, the FDP and CDU/CSU have expressed concerns about the constitutional and financial implications, as well as the potential for an attack on Ukraine being used as a scapegoat for budget conflicts.
2. The Federal Constitutional Court could potentially challenge the government's strategy if they deem it necessary, as the court has ruled that the government must demonstrate whether the instruments used to combat an emergency are suitable for combating the consequences of the disaster.
3. The FDP has previously objected to suspending the debt brake and financing climate projects or support for Ukraine through new loans, as it believes that Germany's involvement in the conflict is based on security policy considerations and not an acute threat to the Federal Republic.
4. The Alliance 90/The Greens have advocated for a citizen's income for Ukrainian refugees, which, if funded through loans, could add to the Federal Republic's public debt and potentially burden future generations with the costs of this defense policy decision.
5. The prolongation of the emergency situation justifying the loans, as well as the potential for further decline in support for Germany's arms and budget aid for Ukraine, could lead to political consequences for the Ampel coalition, as they risk losing credibility and support among their constituents.

Source: www.ntv.de