The consequences of Corona will make Bremen financially troubled for a long time to come, that is …
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But what’s next? And what are the federal and state governments actually allowed to finance with the debts that are newly taken on against the background of the corona pandemic? In addition to Strehl, the parliamentary state secretary in the Federal Ministry of Finance and Bremen member of the Bundestag Sarah Ryglewski (SPD), the Union housekeeper in the Bundestag Klaus-Dieter Gröhler and Stefan Korioth, law professor at Munich’s Ludwig Maximilians University, discussed these questions on the podium.
In the summer, Korioth had prepared an opinion on the so-called Bremen Fund on behalf of the Senate – a debt-financed financial pot to alleviate the corona consequences. In his expertise, he made it clear what he was now repeating on the Berlin podium: Expenditures on credit are legally unproblematic if they are aimed directly at limiting damage caused by Corona, for example with rescue packages for municipal companies. It becomes tricky with “free rider projects”. This refers to projects that the red-green-red government alliance has had in mind for a long time, but for which there has been no money so far. You shouldn’t put a corona cloak on such expenses just to finance them through the Bremen fund.
A socially necessary project
Korioth admitted, however, that it is not always possible to make a clear distinction between short-term measures to combat the effects of the coronavirus and alleged free rider projects. He cited digitization in the education sector as an example. If Bremen is currently purchasing almost 100,000 tablet computers for teachers and students, this investment can be assessed as necessary in the short term so that distance lessons can take place in Corona times. Those who see it more critically, on the other hand, may see the digitization of school operations as a socially necessary project that would have to be tackled even without Corona and would therefore have to be paid for from normal budgetary funds. So it’s all a question of point of view.
Ultimately, it is up to the budget legislature, i.e. parliament, to decide such questions. As a restructuring state, Bremen also has to justify itself to the Stability Council of the federal and state governments. Objections could threaten from there if the Senate were too creative with the exception provisions of the debt brake. As for the outlook for the next few years, Dietmar Strehl and Sarah Ryglewski basically agreed. You just don’t know how long the corona pandemic will burden the public finances. When asked by moderator Jan Hildebrand (“Handelsblatt”) whether Bremen will have to borrow again in 2022, Strehl said: “I would be happy if I could say: I don’t need that.”
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