Putting money into improving the railway and investing in future-proof infrastructure: How can this be financed? Baden-Württemberg’s Prime Minister has a suggestion.
Baden-Württemberg’s Prime Minister Winfried Kretschmann (Greens) is calling for a special fund for urgently needed investments in infrastructure. “We need the possibility of building up a special fund through loans that can only be used for very specific investment purposes,” the Green politician told the German Press Agency in Stuttgart. Kretschmann cited the construction of a hydrogen network as an example, which must be addressed urgently.
Kretschmann: “Debt brake must not become a brake on the future”
“We have almost no green hydrogen today, that is still a thing of the future. But there is no doubt that it will come. Then you need these networks and whoever doesn’t have them will immediately run into enormous competition problems,” said Kretschmann. But because there will only be relevant quantities of green hydrogen in ten years, there will be no returns from investments in the network until then. “For this we need the opportunity to take out loans that can be repaid over a relatively long period of time.”
Kretschmann said he was not at all in favor of loosening the debt brake in general. “I am fully behind that.” It is an important achievement and is intended to protect future generations from excessive debt and interest burdens. “But the debt brake must not become a brake on the future. If important investments are not made, this will also harm the next generation,” said the Green politician.
Baden-Wurttemberg
“Living in another world” After budget ruling: Kretschmann calls for debate on debt brake
Following the ruling of the Federal Constitutional Court, there is a huge gap in the federal budget. BW Prime Minister Kretschmann is hoping for a debate on the debt brake.
Tue.21.11.2023 12:00 SWR1 Baden-Württemberg SWR1 Baden-Württemberg
The debt brake was enshrined in the Basic Law in 2009 after the global financial crisis. According to this, the federal and state governments are no longer allowed to balance their budget deficits by taking out loans.
Debt brake – more or less leeway?
There has been a debate about the debt brake for some time. Some economists are calling for a reform to give the state more leeway. At the beginning of the year, CDU state leader Manuel Hagel, on the other hand, called for significantly higher legal hurdles for exceptions to the debt brake. As in Baden-Württemberg, a two-thirds majority in parliament would also be required at the federal level, he said in April. “We need a kind of eternal guarantee for the debt brake, so that the discussion will stop at some point. All those who are always talking about reforms now actually want to grind down the debt brake.”
Kretschmann calls for investments in the railways
Kretschmann cited the railway as another example of an urgent need for investment. “The traffic light coalition has inherited an enormous backlog of repairs because no investment has been made for decades. This cannot simply be resolved in a budget,” said the Prime Minister. We need to invest heavily in this area – otherwise we run the risk of burdening future generations simply because we do not want to bear them at the moment.
“Nobody can seriously want us to do this piece by piece. We really have to do it quickly, otherwise we won’t make any progress in climate protection.” But it must also be clear that the state alone cannot manage the necessary investments, said Kretschmann. “We need to activate a lot more private capital.”
Criticism from FDP – support from SPD
Investments in hydrogen and the rail network are essential, said FDP parliamentary group leader Hans-Ulrich Rülke. “But this does not require a weakening of the debt brake. The left and green opponents of sound budgeting are blindly sacrificing fiscal sustainability in favor of ecological sustainability.” SPD parliamentary group leader Andreas Stoch said that Baden-Württemberg does not have a debt problem, but a growth problem. “The Prime Minister therefore has our full support when it comes to spending money and making our state and our economy future-proof.” Kretschmann will be in office for almost two more years. There are enough opportunities to set up a corresponding special fund.
