Even before the war, budget politicians had doubts that new borrowing could be capped at 100 billion euros.
(Photo: imago images/image enclosure)
Berlin As a result of the war in Ukraine, the federal government assumes that the new borrowing target for 2022 may double from a maximum of 100 billion euros to more than 200 billion euros. That’s what it’s likely to come down to, a person familiar with budget planning told Reuters on Sunday.
Elsewhere it was said that the amount of net borrowing in the core budget had not yet been decided. Chancellor Olaf Scholz (SPD) had previously announced that the federal government would invest a special fund of 100 billion euros for higher defense spending this year.
The borrowing to equip the special fund will “be booked in full in 2022, in addition to the borrowing in the federal budget,” said Finance State Secretary Florian Toncar (FDP) to Reuters. “Therefore, there are no effects of the special fund on the upper limits permitted under the debt brake for borrowing from 2023.”
Even before the war, budget politicians had doubts that new borrowing could be capped at 100 billion euros. The reasons given included the compensation for reduced tax revenue and the longer Corona business aid, but also the necessary investments for climate protection and the recently agreed package of measures to reduce energy costs.
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Federal Finance Minister Christian Lindner (FDP) described the 100 billion target as a “basic value” on Thursday, the day of the Russian invasion of Ukraine. According to previous planning, the draft budget for 2022 and the medium-term financial planning are to be decided by the cabinet on March 9th. Whether it will stay that way was initially open on Sunday.
This is how the Handelsblatt reports on the developments in the Ukraine war:
2022 will be the third year in a row that the debt brake will be lifted. This was planned anyway and justified with the consequences of the corona pandemic. The sanctions imposed on Russia and the war in Ukraine could also slow down economic development. Now the 100 billion euros announced by Scholz for a special fund for the Bundeswehr are being added.
“A higher level of new debt cannot be ruled out,” said Lindner’s adviser, the former economist Lars Feld, of the “Rheinische Post”, even before Scholz’s announcement. “A weaker economic development will also mean lower income.
More: 100 billion euros: Scholz wants to provide special funds for the Bundeswehr