Despite the supplementary budget: The commitment to the debt rule

The architects of the debt rule in the Basic Law, to whom I can count myself, have taken precautions for exceptional emergency situations which are beyond the control of the state and which have a considerable negative impact on the state's financial position. In an emergency situation, the regular credit limit stipulated in Article 115 of the Basic Law can be exceeded on the basis of a resolution by the majority of the members of the Bundestag. Exceeding the upper limit must be linked to a repayment schedule. Viewed over the years, the permissible debt volume will not increase.

The corona pandemic has been shaping our lives for almost two years now.

No one will seriously deny that we are in an emergency situation - even in view of the currently very high number of infections.

Last year, the exception clause in Article 115 of the Basic Law was applied for the first time.

This made it possible to take powerful countermeasures in the Corona crisis.

The fact that our country has survived this worst crisis after the Second World War so far has relatively little to do with the fact that the economy has been supported with the help of large loans.

Jobs and income could be secured.

As early as 2020, a new debt of 130.5 billion euros had to be accepted, which would have been inconceivable a year earlier.

But this was money well invested.

New borrowing for catch-up processes

The federal budget for 2021 provides for new debt of 240.2 billion euros. Fortunately, tax revenues have developed better than expected in the planning, and in many areas the actual expenditure will be lower than originally planned - for example with Corona corporate aid. At the same time, however, the pandemic situation has worsened again, and there has been added uncertainty about the consequences of a new virus variant. It is clear that the Corona crisis and dealing with its consequences will present us with major challenges in the coming year and well beyond, not only in terms of financial policy.

The second supplementary budget passed by the Federal Cabinet on December 13th is an essential component in coping with the consequences of the pandemic. Without having to increase the new debt compared to the original plan, we are investing 60 billion euros in the energy and climate fund, which will be further developed into a climate and transformation fund. We enable a catch-up process. Because, unaffected by the crisis, many necessary investments in modernizing our economy have fallen by the wayside. For example, the federal government's autumn projection assumes that investment activity in the economy in 2020 and 2021 will remain significantly below the level forecast for this period in the autumn projection of 2019.Overcoming these indirect effects of the current emergency situation cannot be postponed.

Transformation processes are imminent

The additional funds that we are launching with the second supplementary budget are earmarked for clearly defined purposes. It is about overcoming the economic consequences of the corona pandemic in the long term and at the same time helping to ensure that we master one of the great challenges of our time - our economy should become climate-neutral. This requires huge transformation processes that we want to support. With the second supplementary budget 2021, we are creating planning security through reliable financing. This will trigger additional momentum in investments in the transformation of our economy - and thus also lead to sustainable growth impulses, which in turn is necessary,in order to be able to comply with the regular credit limit of the debt rule again from 2023 on.

The second supplementary budget 2021 therefore makes economic sense and fully complies with the legal framework that the debt rule gives us.

Last year, additional credit authorizations were created and booked in the energy and climate funds.

This year, however, only existing, unused credit authorizations will be used.

There will also be a clearly defined economic plan for the use of the funds.

Those who considered the 2020 procedure to be constitutional will be all the less able to criticize the 2021 procedure.

Even if one or the other commentator wants to create a different impression: The new federal government is committed to the debt rule of the Basic Law without ifs and buts.

In this, in the next and in all the following years.

Werner Gatzer is State Secretary in the Federal Ministry of Finance.