The state of Berlin will be in debt with an additional 7.3 billion euros by the end of next year. This is provided for in the second supplementary budget for 2020/21, which the House of Representatives will decide on Thursday. With the votes of the SPD, the Left and the Greens, the CDU wants to abstain. FDP and AfD will vote against the additional budget.
Red-Red-Green justifies the unprecedented high level of new debt with the necessary financial provisions to combat the corona crisis and the dramatically high tax shortfalls.
At the beginning of the pandemic, Senator for Finance Matthias Kollatz (SPD) suggested raising 5.5 billion euros on the capital market, and since then the government factions have put a lot of money on it.
It is undisputed that the tax shortfalls (this year expected to be 2.3 billion euros, next year a further 2 billion euros) will have to be offset by loans. In the current year there is “only” a financial gap of 1.9 billion euros, because several hundred million euros of public investment funds are not being spent.
Berlin forms a “pandemic reserve”
It is currently difficult to predict what the remaining loans will actually be needed for and in what amount. Red-Red-Green has first created a “pandemic reserve”, into which 3.3 billion euros are currently flowing.
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Fighting the pandemic and its health, social and economic consequences will only burden the state budget in 2020 with a small three-digit million amount, because the federal government bears most of the costs.
For example, state expenses for medical procurement, for relieving the burden on hospitals and for economic aid are largely offset.
Opposition, business and the audit office criticize the debt
The opposition groups, but also the Chamber of Commerce and Industry (IHK) and the State Audit Office criticize the second supplementary budget – which the coalition groups increased by 700 million euros in November – because it also contains expenses that cannot be allocated to combating the crisis.
This includes 100 million euros for the purchase of further private rental apartments and additional costs in the high double-digit millions for refugee accommodation, which have so far been underestimated. In addition, funds for the semester ticket for students to prevent price increases from April 2021.
The repayment of the new debt, which begins in 2023, will burden the Berlin budget with over 200 million euros annually until 2050.
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