By Andrea Thomas
BERLIN (Dow Jones) – In view of the current budget crisis, Federal Chancellor Olaf Scholz (SPD) has pledged to present a solution “quickly, but not hastily” to close the billion-dollar gap in the budget caused by the Federal Constitutional Court’s ruling. It had previously been announced that the Bundestag would not discuss the 2024 federal budget next week. The consequences would have to be carefully examined.
“This should be done very quickly and very promptly, and it can be done quickly and promptly,” said Scholz at a press conference with a view to the budget talks. However, he would find it “very right” that after the Federal Constitutional Court’s decision on the investment opportunities associated with the climate and transformation fund, the effects on the budget should be carefully examined “by the government, by the government factions, but also by the opposition factions”.
“All questions should be answered,” said Scholz. It is important to him “that when decisions are made soon, no one has the feeling that it was over their head.”
It is also clear that the government parties have the firm will to implement this decision very quickly. He indicated that there would be no radical change in budget policy. According to Scholz, the government factions will ensure “that what we have set out to do for good cohesion in Germany, for the further development of our welfare state, for the modernization of our national economy, can actually be pursued further, that we can achieve the ecological transformation, which is important for our global competitiveness and for protecting the climate.”
Therefore, there is “ambition and the will to do this well and correctly, quickly but not hastily,” said the Chancellor.
There are currently high-pressure discussions in the federal government about how budget policy should be changed in light of the Federal Constitutional Court’s ruling. With regard to the supplementary budget for 2021, the Karlsruhe court ruled that loan authorizations amounting to 60 billion euros, which were originally intended to deal with the corona pandemic, may not be reallocated as funds for the energy and climate fund. This fund was further developed into the Climate and Transformation Fund.
According to the federal government, the ruling also has consequences for the government’s Economic Stabilization Fund (WSF), which was given credit authorizations amounting to 200 billion euros in autumn 2022 after the outbreak of the war in Ukraine to cushion the energy price shock.
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(END) Dow Jones Newswires
November 22, 2023 1:25 p.m. ET (18:25 GMT)