Budget talks: federal government pumping up capital markets again – politics

The plenary session of the Bundestag will decide the budget for next year at the end of November. Photo: dpa/Michael Kappeler

The budget committee of the Bundestag adjusts the budget for 2023. The debt curb must be respected again, even though an additional loan of 46 billion euros is planned.

The federal budget for 2023 is in effect. The Bundestag’s budget committee sat together for more than 18 hours without interruption for the final consultation and early Friday morning finally managed to mark the budget. Plans predict spending of almost 480 billion euros for the next year. The federal government is taking on new loans on a large scale, but officially it is once again in compliance with the rules of debt restraint. A mirror.

What did the owners of the house decide? In the final “adjustment session”, the Bundestag’s budget experts went over the government’s draft budget and made various changes. For the next year, expenses of 476.3 billion euros are planned. This is 31 billion more than Finance Minister Christian Lindner (FDP) initially proposed. 13 billion euros more are available for investment than originally planned. Given the sharp increase in energy and food costs as a result of Russia’s war of aggression against Ukraine, the federal government is cutting taxes on a large scale, disbursing aid and increasing social benefits to ease the financial burden of citizens. More money is also available for foreign policy and development. All this is reflected in the budget. “This budget stands for social justice, climate protection and freedom at the turn of the century,” said a joint statement on Friday by traffic light owners Dennis Rohde (SPD), Sven-Christian Kindler (Greens) and Otto Fricke (FDP). . . The 2023 budget will be voted on in the plenary session of the Bundestag on November 25.

How much new debt will the federal government take on in the next year? Additional loans of around 46 billion euros are planned as part of the budget. Finance Minister Lindner had originally planned only new debts of about 17 billion euros. However, the debt curb rules will be respected again for the first time since 2019. This is particularly important for the FDP and its finance minister, the other two coalition parties are much less strict on this matter. The debt brake provided for in the Basic Law limits new state borrowing in normal economic times. However, in exceptional situations, deviations can be made – which the federal government has regularly done on a large scale since 2020 due to the corona pandemic. In the coming year, the debt curb should officially come into effect again. However, the budget legislator – ie. The Bundestag – is making full use of the space allowed. Because of the gloomy economic outlook, he can get more money in the capital markets than in times when the economy is running smoothly.

Why is the debt brake applied only “formally”? At the end of 2022, the federal government created two extensive, debt-financed shadow budgets: the special fund for the Bundeswehr in the amount of 100 billion euros and the shield against high energy prices (double boom) in the amount of 200 billion. euros. Both are a reaction to Russia’s war of aggression against Ukraine and are temporary. And significant funding will flow from both in 2023. But that happens outside of the federal budget. Among other things, the planned gas price curb will be paid for by the protective shield.

What are the biggest items in the budget? Traditionally, the federal government spends most of its money on labor and social issues. 166 billion euros are calculated for this. The regular budget of the Ministry of Defense is said to be around 50 billion euros. The Ministry for Digital and Transport will receive almost 36 billion euros.

What does the opposition say? The Union, AfD and Linke strongly criticized the decisions of the coalition budget holders on Friday. The budget spokesman for the CDU/CSU parliamentary group, Christian Haase (CDU), criticized the fact that the traffic light wants to make full use of the space for new borrowing. “Nothing illegal is happening. But being able to take on debt doesn’t mean you have to take it on.” AfD House Clerk Peter Boehringer said there were “too many accounting tricks and too many side budgets” in the budget. Left-wing MP Gesine Lötzsch criticized the budget as socially unbalanced and called for a tax reform aimed mainly at the wealthy.

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