Söder versus Scholz: The end of the generous state is approaching

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The morning after, Federal Finance Minister Olaf Scholz (SPD) presented himself in the role of strict treasurer: "I am responsible for ensuring that our country functions well and that the money is held together," he said on breakfast television.

It is part of the job to endure a “somewhat rough situation” from time to time.

Scholz described the verbal exchange of blows with Bavaria's Prime Minister Markus Söder (CSU) a few hours earlier in the conference with the country leaders as “rough situation”.

Söder reminded Scholz during the Prime Minister's Conference that he was neither Chancellor nor King of Germany nor ruler of the world, as participants report.

And he doesn't even need to grin "that smurfy".

This is said to have been preceded by Scholz's announcement that none of the assembled Prime Ministers should expect the federal government to set up an account from which all expenses for cases of hardship are paid.

The states would have to participate in the hardship fund announced weeks ago for all those companies that have so far failed the aid grid.

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The battle of words between the SPD candidate for chancellor and the possible candidate for chancellor from the CDU and CSU is remarkable not only because of its sharpness and the approaching federal election, but even more because of its content.

Scholz in particular did not attract the public's attention in recent months for holding the federal funds together and demanding more financial participation from the 16 federal states in the costs of the corona pandemic.

Rather, he attached great importance to countering the crisis with “Bazooka” and “Wumms”; there was no shortage of money.

Reminders were more likely to come from the parliamentary groups, whether from Eckhardt Rehberg, the head housekeeper of the Union, or from Carsten Schneider, the parliamentary manager of the SPD parliamentary group.

Already in November Schneider warned that the federal government could no longer bear the costs of massive corporate aid alone.

Little has changed since then, the federal government still bears the majority of the costs, although - and this is often referred to in Berlin - the federal states are now collecting more taxes.

"The statements of the Bavarian Prime Minister show that he apparently has no sense of the responsibility of the entire country, but only thinks in terms of his regional jurisdiction," Schneider commented on Söder's argument with Scholz.

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The fact that the answer to the question of which coffers will be used to pay for the corona crisis can also be doubted for the future.

The Prime Minister and Chancellor Angela Merkel (CDU) decided on Wednesday evening not only the "half-financed" hardship fund - which could amount to 1.5 billion euros from the federal government and again the same amount from the federal states.

Point 13 of the resolution also states that the state and municipal share of the child bonus of 150 euros will be reimbursed to the states by the federal government retrospectively.

This is about three billion euros, for which the federal government is now paying in addition.

That doesn't sound like an overly strict guardian of the federal treasury: the federal states have to contribute 1.5 billion euros to the hardship fund so that double the amount for the child bonus is reimbursed.

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"We will see the consequences of the confrontation between Scholz and Söder when drawing up the supplementary federal budget that has already been announced," said Otto Fricke, budget politician of the FDP.

Even if Scholz apparently understood that he could not let the countries get away with everything, it can be assumed that the motto will continue to be who orders, pays.

"The federal states are always happy to pay for their approval of the Corona resolutions," said the member of the Bundestag.

Scholz had already informed the Union and SPD housekeepers on Wednesday, before he was called Schlumpf by Schröder, that the new debt of 180 billion euros planned for 2021 will not be enough.

In a TV interview with WELT, Scholz confirmed that "in view of the many new requirements that have now been formulated, including for example through testing", it will be necessary that "we also accompany this with a supplementary budget".

However, he did not provide any information about the exact amount of the supplementary budget.

It is not about "very little money".

The budget options are great, they should be expanded again in order to serve all wishes and commitments to combat the crisis, said Scholz.

So far, a buffer of 35 billion euros has been planned in the federal budget for this year for measures to combat pandemics.

Of this, around twelve billion euros have already been earmarked after the first two months.

Among other things, a good six billion euros for vaccine procurement and one and a half billion euros for hospital financing.

An additional three billion euros have been announced for long-term care insurance and a further billion euros for hospital beds.

Source: WORLD infographic

It is unclear how much the corona tests will cost, for which the federal government also wants to cover the costs.

So far, a medium to high three-digit million amount per month has been assumed.

On the other hand, the same thing can happen this year as in the previous year: not all of the planned money will be spent.

In the previous year, among other things, corporate aid, which was only sparingly drained, contributed to this.

These are only gradually arriving where they are urgently needed. According to current figures from the Federal Ministry of Economics, 81 percent of the application volume for November aid and 67 percent of December aid have now been paid out. 90 percent of the re-start grants for self-employed people have already been transferred - although they can only be applied for since mid-February.