Germany plans return to debt brake rule in 2023 budget

Berlin, July 1, (dpa/GNA) - German Finance Minister Christian Lindner is set to present a 2023 budget on Friday that reinstates the so-called debt brake after suspending it for three years to cope with the fallout of the coronavirus pandemic.

The budget includes borrowing of €17.2 billion ($18 billion) next year, meaning that Lindner is adhering to the constitutional rule that limits Germany’s public deficit to 0.35% of economic output unless there are exceptional economic circumstances.

Christian Haase, budgetary spokesman for the conservative opposition CDU/CSU parliamentary group, criticized Lindner’s budget, saying that the minister was “acting like a driver driving into fog and hoping not to hit anything and escaping without an accident.”

Mathias Middelberg, also of the CDU/CSU, said the economic data on which the draft budget was based were already outdated.

The budget has also been criticized by the German Trade Union Confederation (DGB), with board member Stefan Körzell referring to it as an “austerity dictate.”

“Lindner is choking off investments, demand and thus the economy – this is how Germany will slide into the next crisis instead of coming out of the current one stronger,” Körzell said.

“Spending cuts are completely the wrong remedy for high inflation, because the causes of inflation do not lie in government spending, but in specific supply bottlenecks,” he added.

The traditionally frugal nation – also Europe’s largest economy – broke its own debt rules at the beginning of the coronavirus pandemic to unleash billions of euros in financial aid to steer the economy through the crisis.