Berlin (dpa) – German lawmakers on Friday approved the government’s hastily prepared plans to fix a major budgetary crisis precipitated last month by a landmark court ruling.
The German lower house, the Bundestag, passed a supplementary budget for 2023 on Friday after also being forced to suspend borrowing rules following a Constitutional Court ruling in mid-November that left it with a huge budget gap.
According to the latest plans, borrowing stands at €70.61 billion ($77.39 billion) for this year, which is €44.8 billion above the permissible borrowing limit.
To get around that, the Bundestag was asked to approve an exception to Germany’s constitutional ban on borrowing, known as the debt brake.
The top court decided in mid-November that €60 billion in emergency loans to combat the coronavirus pandemic could not be reallocated to a climate fund, sending the budget planning by Chancellor Olaf Scholz’s coalition government into disarray.
The supplementary budget enabled the government to give the funds that had already been disbursed a secure legal basis. These funds were in particular for the gas and electricity price caps and aid for flood victims in western Germany, and came to some €45 billion.
“We are thus putting the electricity and gas price caps on a secure legal footing. We are securing the aid in the Ahr valley – that is right and that is important,” Green Party Budget Minister Sven-Christian Kindler said in the Bundestag on Friday.
The Constitutional Court’s budget ruling made it clear that the federal government should not have taken out these loans and used them for the past two years.
The loans had been authorized in 2021 and 2022 when the debt brake was suspended due to the coronavirus crisis and the war in Ukraine.
The coalition government had planned to continue using the money in 2023 and 2024. However, the judges ruled that the federal government may not set aside emergency loans for later years. Without the hastily prepared supplementary budget, the budget for 2023 would have been in breach of the constitution.
In a related vote designed to bring the government more revenue, the Bundestag on Friday raised the CO2 price for petrol and heating, beginning January 2024.
The price will be raised from €30 ($32) per ton of CO2 to €45.
Initially the three-party coalition government wanted to only raise the price to €40, but the budgetary crisis prompted it to revive a previous plan with a higher price.
The proceeds from the higher prices should flow into the government’s multi-year climate and economic transformation fund, which used to finance projects to deal with climate change, among other things.
One other measure designed to save the government money was approved by the Bundestag on Friday. The new law will see parents with particularly high incomes lose their right to parental allowance.
In future, couples can receive parental allowance only up to an annual taxable income of €175,000. A limit of €150,000 applies to single parents.
Notepad
Update
Rewrites wrapping up all developments, adds higher CO2 price
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