The picture and information provided by Reuters point to the fact that there is a problem not only in transferring the remaining funds of 60 billion euros from the anti-epidemic fund to climate protection and industrial policy resources, which means a budget gap of between 10 and 20 billion euros. Annually in the coming years, but also with more than 29 other special budget funds on which last week’s Constitutional Court decision will likely be extended.
In this regard, the Karlsruhe Board of Directors decided that resources from these special funds cannot be transferred only using innovative solutions, and that transparency rules and the constitutional debt brake rule must be observed.
For this reason, it is likely that in the event of this year’s budget, the German coalition parties will suspend the debt brake rule, which allows a deficit of a maximum of 0.35% of GDP, and the German government will work quickly to prepare an additional budget for this year’s budget. Year 2023. The big question is whether this suspension could also take place in the case of the 2024 budget, and therefore whether the justification for the necessity of doing so due to an “exceptional emergency” is valid for two consecutive years.
Industrial organizations and major foreign investors (such as Intel and TMSC chip factories) are urging the government to clarify the scope of its budget and whether or not those involved can rely on the promised support. According to information from the news agency, the German government wants to respect the support contracts for Intel and TMSC, but at the same time, the government is expected to close the Economic Stabilization Fund worth 200 billion euros at the end of this year. The spending freeze came into effect for most items. This may even affect the eight billion euros in German aid allocated to Ukraine, but it does not affect the German military development program worth one hundred billion euros, because it is subject to a different set of constitutional rules.
Cover image source: Getty Images