Additional quote accepted in Germany
The statement from the German Ministry of Finance states that the additional budget for 2023 was approved by the Council of Ministers.
The suspension of the debt brake was justified by the energy crisis that arose with the war between Russia and Ukraine, and the statement stated that the effects of the war in Ukraine would continue to significantly affect the income and expenditure of the German government. and that other effects of the court decision on private funds were still being examined.
With the supplementary budget, the German government suspended for the fourth consecutive year the debt brake mechanism provided for in the Constitution, which limits the country’s budget deficit to 0.35 percent of gross domestic product.
The German government will now need to borrow around €70.6 billion instead of the €45 billion previously planned.
VOTE IS EXPECTED TO BE VOTED NEXT MONTH
The Bundestag must approve the suspension of the debt brake mechanism for the fourth time. The additional budget is expected to be voted on in parliament next month.
On October 15, the German Constitutional Court ruled that the German coalition government’s decision to transfer €60 billion of unused credit due to the Covid-19 outbreak to a climate fund was unconstitutional.
Following this decision, the German federal government faced difficult decisions regarding the controversial budget.
The coalition government formed by the Social Democratic Party (SPD), the Green Party and the Free Democratic Party (FDP) was attempting to prepare the federal budgets for 2023 and 2024 in accordance with the Constitution following the court’s decision.
Although the German federal government increased its debt by 60 billion euros due to the emergency situation during the Covid-19 epidemic, the loan in question was not necessary to deal with Covid-19 and its consequences.
The German coalition government wanted to use the loan in question for the country’s Climate and Transformation Fund.
The court’s decision leaves the federal government facing the biggest economic policy challenge of this legislative session, economists say. (AA)
Source: Sozcu
Andrew Dwight is an author and economy journalist who writes for 24 News Globe. He has a deep understanding of financial markets and a passion for analyzing economic trends and news. With a talent for breaking down complex economic concepts into easily understandable terms, Andrew has become a respected voice in the field of economics journalism.
