Budget crisis: Union demands leadership from Olaf Scholz

Before his government declaration in the Bundestag, Union politicians from Chancellor Olaf Scholz (SPD) demands leadership in the budget crisis. The Chancellor must explain how he wants to put the federal budgets for 2023 and 2024 on a solid footing, said Union parliamentary group vice-president Jens Spahn Rhenish Post. “Scholz is the elected chancellor, he has to lead and not always just let himself be carried away,” said Saxony’s Prime Minister Michael Kretschmer Daily Mirror.

North Rhine-Westphalia’s Prime Minister Hendrik Wüst (CDU) complained that the traffic lights had managed to ruin Germany’s reputation as an anchor of stability in two years. The Chancellor has it in his own hands to turn things around – “with honesty instead of constant tricks,” he told the editorial network Germany (RND).

Traffic light considers declaring an emergency

Scholz wants to be in the morning Bundestag talk about the traffic light government’s budget crisis. A two-hour debate is planned following his government statement. From the statements made so far it can be deduced that the opposition will sharply attack the government because of an unconstitutional reallocation of loans. Because the Federal Constitutional Court had – in response to a lawsuit from the Union – declared invalid that the traffic light coalition wanted to subsequently use 60 billion euros in credit from the corona pandemic for climate protection and the modernization of the economy.

The money is now missing and the federal government is currently cutting its budget. The climate and transformation fund, the energy economic stabilization fund and the special fund for reconstruction aid after the flood disaster are particularly affected. Finance Minister Christian Lindner now wants to take out additional loans for the current year, which would exceed the debt ceiling for 2023 by almost 45 billion euros.

The traffic light coalition is considering declaring an emergency within the meaning of the Basic Law so that the federal government can take out more credit than that enshrined in the Basic Law Debt brake permitted.

Union reserves the right to file another lawsuit against the 2024 budget

So far, Scholz had only spoken out in a video message in which he assured citizens that they would make quick decisions about how to proceed. He said state aid in special emergencies would still be possible.

On Monday, the cabinet launched a supplementary budget for the current year and thus also the first steps towards suspending the debt brake by the coalition factions in the Bundestag. The SPD and the Greens are already open to this.

Union parliamentary group leader Friedrich Merz announced that he would closely examine the supplementary budget. The parliamentary group will then decide whether they will also take legal action against this in the Constitutional Court, said Merz, who is also CDU chairman. With the construction planned by the traffic light, there seems to be a way to make the supplementary budget conform to the constitution. That does not mean that the Union agrees to the budget. “I don’t see that,” said Merz. It is likely that there will be no further lawsuit in Karlsruhe.

However, the Union reserves the right to file another lawsuit for the 2024 budget, which still needs to be revised by the traffic light. “If the federal government is of the opinion that it should also declare an exceptional emergency situation for 2024, then I do not see this as constitutional, at least from today’s perspective.”

FDP announces austerity measures for several years

Lindner was already preparing the traffic light factions in the Bundestag for tough negotiations about the budget for the coming year. “Considerable efforts will still be required to finalize the 2024 federal budget,” writes the FDP politician in a letter to the SPD, Greens and FDP factions. “We will have to have intensive discussions that will not always be easy.”

FDP parliamentary group leader Christian Dürr meanwhile swore citizens to adopt austerity measures in the next few years. “We will have to exercise moderation well beyond this election period,” he told “Stern”. He also confirmed in the ARDTopics of the daythat the FDP supports the debt brake.

Ver.di – like the SPD and the Greens – spoke out in favor of reforming the debt brake. In addition, union leader Frank Werneke called for the debt brake to be suspended next year as well.