The federal and state governments are preparing a new license for higher debts in the coming year.

The Stability Council is of the opinion "that an extraordinary emergency situation or natural disaster within the meaning of Article 109 Paragraph 3 S 2 of the Basic Law can still be determined for the year 2022", it says in the proposed resolution for the meeting on June 21.

The Stability Council has the task of monitoring correct compliance with the debt brake introduced in 2011 in the Basic Law.

But because the committee is not neutral, since it only includes the finance ministers from the federal and state levels and the federal economics ministers, there is also a nine-member independent advisory board of experts, including the Bundesbank.

Among these household guards there is strong opposition to the further use of the exception.

Heike Goebel

Responsible editor for economic policy, responsible for “The order of the economy”.

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    "Not a word" had the Stability Council even attempted to define and justify the specific nature of the extraordinary emergency situation for 2022, which the state cannot control, criticizes advisory board member Hans-Günter Henneke, the chief executive of the district assembly.

    Unlike in 2020 and 2021, everyone assumed that the emergency situation caused by the pandemic would end in the coming year and that both health-related assistance and economic assistance would no longer be needed, Henneke told the FAZ. Clause no longer existed in the Basic Law.

    "Politically made decisions"

    If the finance ministers have their way, the German deficit should still amount to around 3 percent of economic output (measured by gross domestic product) in 2022. That would be a significant decrease from the 9 percent in the first year of the pandemic and the 4.5 percent planned for this year - but still far more than the constitution allows in normal times. Accordingly, budgets of the federal and state governments must be balanced “in principle without income from loans”, only the federal government has a leverage of 0.35 percent. For higher loans, the housekeepers therefore need a further determination of an emergency by the Bundestag. The vote of the Stability Council serves to prepare the vote.

    Henneke refuses. In his view, the new debts estimated for 2022 are no longer based on the previous emergency situation, but on “politically arbitrary decisions”, such as the planned investment offensive by the federal government and municipalities. There may be good reasons for this, but they did not meet the requirements of the constitution. It is also wrong that the federal government would rather incur debts than dissolve the refugee reserve of 50 billion euros. Even now, they are still initiating new government tasks instead of using all potential savings. Henneke points out the all-day care entitlement for elementary school children, which the Bundestag now wants to pass without clarifying who bears the annual costs of 4.5 billion euros.

    Henneke formulated his concerns about the continued use of the exception clause in a paper for the advisory board, which is headed by the financial scientist Thiess Büttner. If the budget guards share his criticism, as Henneke expects, the statement will be sent to the finance ministers. According to the law, the recommendations of the Advisory Council should be "an important basis for the work of the Stability Council". But it is unlikely that the finance ministers will allow themselves to be dissuaded from their plan to use the debt brake exception clause for the third time. The approval of the Bundestag is also considered certain.