Federal Council

It’s easy to scoff at the traffic light coalition at the moment. Who is at fault… The ruling on the application of the debt brake from Karlsruhe came from Olaf Scholz’s government like what economists call an exogenous shock, i.e. an external event that suddenly and unexpectedly changes reality permanently.

Article 115 of the Basic Law states that loans in excess of the debt brake may be taken out in the event of natural disasters and in “extraordinary emergency situations that are beyond the state’s control and significantly affect the state’s financial situation.” The latter, at least, actually happened with the ruling of the Federal Constitutional Court. The traffic light coalition is currently in a hectic process of readjusting its entire budget policy.

Of course, the emergency that is now to be declared for 2023 is not an exceptional emergency, not an exogenous shock, but simply the result of a government emergency. Justifying them in terms of energy policy is undoubtedly a challenge. It will be interesting to see what will be in the proposal that Finance Minister Christian Lindner will bring to the cabinet at the beginning of the week. And there must be an incontestable justification, that’s what Karlsruhe demanded.

Since 2020, those in power have stretched the various credit-financed protective shields very widely. In no emergency year did the credit authorizations created due to the pandemic, the war in Ukraine, energy price inflation and the Ahr Valley flood have to be fully used.

That was the basis of the careless plan to stash the unused opportunities and reserve them for other purposes, as a reserve for the time after the acute emergency, on the grounds that emergencies have a long-lasting effect. But it’s no longer that easy after the Karlsruhe ruling.

Because of the energy crisis that had clearly occurred, 200 billion euros were placed in the Economic Stabilization Fund (WSF) at the end of last year. Of this, around 170 billion euros were still available for this year. 40 billion are now needed. In this respect, the question arises as to how serious the energy crisis will still be with a view to 2024.

Anyone who wants to explain the emergency situation for the coming year must be able to argue very well in order to overcome the hurdle of the detailed and comprehensible explanation set by the Constitutional Court.

After the initial shock, the traffic light quickly entered the phase of holding out slogans and forming a wagon fort. This is usually followed by the phase of self-knowledge and insight into reality. This was shown in the Chancellor’s video message on Friday. Olaf Scholz avoided as much as possible to commit to the fact that the federal budget for 2024 will now be passed through the Bundestag and Bundesrat before the end of the year.

The Basic Law makes it possible to act later

Scholz said that the budget for next year would be “revised carefully in the light of the judgment – ​​quickly, but with due care.” And that will take a few weeks if you want a proper legislative process. The risk that a revision could be challenged in the Hopplahopp procedure in Karlsruhe is not small. Ultimately, every single member of the Bundestag who feels that their rights to advice and information have been violated can do this.

So it will probably be the end of January, or even February, until the Bundestag and then the Bundesrat decide on the 2024 budget. That wouldn’t be bad. The Basic Law enables the federal government to continue to operate fairly properly on the basis of the old budget.

The traffic light coalition has been shaken up by the Karlsruhe ruling in a way that probably no federal government has ever seen before. Blaming is unnecessary. The unconstitutionality of a debt strategy that was questionable from the start was a collective failure of the cabinet members of the SPD, Greens and FDP.

That’s why it seems a little pathetic to now dismiss a state secretary. Scholz & Co. are currently a government on probation. The Chancellor sent the first signs of recognizing this on Friday.