“We will have to spend less money to achieve our goals,” the German chancellor admitted, Olaf ScholzAfter resolving the coalition and budget crisis between the social democrats, greens and liberals that gripped the tripartite party for four weeks. The announcement came after a marathon night of negotiations with him. Ministers of Finance, liberal Christian Lindner and Ministers of Economy and Climate Protection, Green Robert Habeck.
The winner was Lindner. According to Scholz, in 2024 the debt brake, which is the workhorse of the liberals, will not be suspended again, but rather 17 billion euro cut in various games. This is guaranteed Ukraine will continue to rely on German aid Germany is home to around one and a half million Ukrainians – “as long as it takes”, in the Chancellor’s words – which means 8 billion euros in arms and 6 billion euros in refugees. There will be no cuts in social aidThis guarantees Scholz’s social democrats some peace. But resources will be cut Climate Protection and Transformation Fund (KTF). By 2027, 43 billion euros will be deducted from the budgets to be distributed.
The losers of the war were the Greens, and this was reflected even in the sad face and exhausted eyes of the head of the Economy, Habeck. “We will pursue the goal of transformation and climate protection,” assured Scholz, insisting that his coalition’s three priority goals will be defended: social cohesion, solidarity with Ukraine and decarbonization.
Constitutional Judiciary
The real sacrifice was expected to be for Habeck’s ministry. Coalition crisis emerged after this decision Constitutional Court It blocked 60 billion euros that would be transferred to the KTF and a special fund against the epidemic in the coming years. This operation violated the constitutional principle debt brakeThe court ruled in response to a lawsuit filed by the conservative opposition.
Was it one? Political and economic coup and one breach of credibility Lindner and Scholz, who was Minister of Finance before becoming Chancellor. Therefore, he should have been aware that this operation would not pass the Constitutional test. The immediate effect of this is to delay the approval of the 2024 budget, along with a supplementary budget for 2023 that will be presented to Parliament this week.
The debt brake mandates that debt should not exceed 0.35% of gross domestic product (GDP), except in emergencies. For the Greens, this tool needs to be reformed or eliminated. The Social Democrats approved a resolution to eliminate this law at their federal congress last weekend. For now, this is considered a victory for Lindner, the weakest party of the trio. The Liberals’ voting intention stands at 5%, the minimum required to win seats.