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Germany to suspend 'debt brake,' present revised 2023 budget
The German government plans to draw up a supplementary budget for 2023 after a Constitutional Court rulingthrew spending plans into disarray, Finance Minister Christian Lindner said in Berlin on Thursday.
A decision to suspend a so-called debt brake will allow the government to significantly increase new borrowing this year. Lindner intends to present a supplementary budget for the current year next week on Wednesday.
"There is now new legal clarity on how we have to deal with special assets and emergency loans," said Lindner. "We will now put expenditure, particularly for the electricity and gas price brakes, on a constitutionally secure footing."
The budget for 2024 can only be discussed once there is a "constitutionally secure situation" for 2023, Lindner said.
€60 billion hole in the budget
Lindner's decision follows a ruling by the Constitutional Court, which said a move to redirect €60 billion ($65 billion) of unused debt from the pandemic era to a climate fund was unconstitutional.
The court's decision has implications not only for planned climate investments, but also for the financing of the energy price brake, which is intended to provide relief from high electricity and gas costs.
The government wants to use an exemption from the debt brake this year because of the Karlsruhe budget ruling. The debt brake is part of German constitution and imposes borrowing restrictions on the government, reports DW.