Finance Minister disagrees with multiple amendments to a provision in the German Constitution

German Finance Minister Christian Lindner announced on December 16th a plan to reform the country's public debt regulations to boost public spending during the economic downturn, while also criticizing planned price increases for farmers and airlines.

German Finance Minister Linder. (Source: AFP)

According to Politico , Minister Lindner said he plans to revise an economic calculation component to quantify the amount of new borrowing the government is allowed to take out each year under Germany's "debt brake" regulation.

Lindner said the reforms would be implemented next year, giving the government more flexibility in spending in 2024, a year in which the German Institute for Economic Research forecasts the economy will continue to contract.

However, Lindner (of the Free Democratic Party - FDP) stressed that he does not support further changes to the "debt brake" regulations, for example, the proposal to allow investments in climate protection to be exempt from the spending restrictions. FDP coalition partners, such as Prime Minister Olaf Scholz's Social Democrats and Economy Minister Robert Habeck's Greens, have called for more radical reforms to borrowing regulations.

The "debt brake," enshrined in the German Constitution, which keeps the federal deficit at 0.35% of GDP except in emergencies, has become a major political issue in Germany's budget crisis, which has lasted for over a month.

Under the budget agreement, the government agreed to maintain the debt freeze in 2024, after temporarily suspending it this year and in previous years due to the conflict in Ukraine, the energy crisis, and the COVID-19 pandemic. However, the ruling coalition still emphasized that the debt freeze could be suspended again in 2024 if Germany needs further assistance for Ukraine, for example, if the conflict situation worsens or if other supporting countries like the US reduce aid.

The ruling coalition also continues to debate spending cuts as part of the budget deal, indicating the agreement remains fragile. Lindner said that some cuts affecting subsidies for diesel used in agriculture, as well as the proposed tax on domestic jet fuel, need to be reconsidered because he does not want to burden businesses further.

Source: https://baoquocte.vn/bo-truong-tai-chinh-khong-tan-thanh-sua-doi-nhieu-lan-mot-quy-dinh-trong-hien-phap-duc-254212.html