Home motorcycle price German Finance Minister wants to lift debt ceiling | News | DW

German Finance Minister wants to lift debt ceiling | News | DW


German cities in financial difficulty should have their debts taken over by the federal government, if Finance Minister Olaf Scholz gets what he wants.

But it might not be so easy, as the move would break a taboo of the German conservative government against debt that has been in the constitution since 2009, when a “debt brake” was written into the law. Basic law following the European Union. financial crisis.

Die zeit The newspaper reported on Wednesday that Scholz, who is also Angela Merkel’s vice-chancellor, plans to present a plan in March that would temporarily allow some 2,500 municipalities to pass their debts on to the federal government.

The program aims to free up resources to allow local governments to invest more in roads, schools and hospitals, according to the report. While many small towns struggle to pay for infrastructure, the federal government has some capacity to spare: in January, Germany posted a record budget surplus.

The finance ministry declined to comment on the news article, although it was also independently reported by Der Spiegel. Both media cited anonymous ministerial sources.

The black zero

The debt brake meant that from 2016 German federal and state governments were not allowed to run a budget deficit of more than 0.35% of GDP, although exceptions could be made in the event of natural disaster or economic crisis.

The drag has manifested itself recently in the so-called “black zero”, the colloquial name of the German finance ministry’s insistence on maintaining a balanced budget without incurring new debt.

Scholz has pledged to maintain politics, at least so far, despite being a member of the center-left Social Democrats, some of whom are skeptical of the black zero.

But the move promises a political headache: Scholz could struggle to get the plan through parliament without putting another crack in the governing coalition.

Support from the government ranks is not at all assured and members of the center-right Christian Democratic Union (CDU) of Angela Merkel have already voiced criticism.

“You cannot just suspend the debt brake at your convenience, just as you cannot suspend fundamental rights,” said Eckhardt Rehberg, CDU member in the Bundestag. Frankfurter Allgemeine Zeitung Wednesday. “Scholz does not have a majority to break the dam. He should bury this project quickly.”

In addition, amending the constitution requires a two-thirds majority in both houses of parliament, the Bundestag and the Bundesrat, which would mean that, even with the support of the CDU, he would need opposition votes to pass the bill.

bk / aw (AFP, dpa)


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