Pressure mounts on German finance minister as auditors deem energy shield ‘unconstitutional’ – EURACTIV.com

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Germany’s Federal Audit Office on Tuesday declared the government’s energy bailout “unconstitutional”, adding to repeated calls for Finance Minister Christian Lindner (FDP) to end the country’s debt frenzy.

The federal government’s latest €200 billion investment offensive to protect its citizens and businesses from rising energy prices is proving a hard pill for the FDP leader and – theoretically – champion to swallow. of frugality Lindner, who faced backlash from the conservative CDU and within its ranks.

The proposed energy bailout is to be financed from a special fund, with borrowings to be made in the current year while payments are to be rolled out through 2024. It therefore poses, according to the auditors, in essence, borrowing “in stock” and thus violating national budgetary rules.

“The ‘in-stock’ loan project violates the constitutional principle of annuality,” reads the opinion of the Court of Auditors. Instead, he argues for the bailout to be funded from the normal federal budget with no detours.

The proposed energy shield is the latest in a series of “extraordinary” investment packages handed down by the coalition government and endorsed by Lindner since he took office last December.

Conservative CDU budget spokesman Christian Haase commented on the Federal Audit Office report, saying: ‘we cannot accept the traffic light [German coalition government] funding route. We cannot just ignore the aspect of unconstitutionality,” the CDU parliamentarian told the Handelsblatt.

This, combined with Scholz’s extraordinary €100 billion defense fund following the Russian invasion of Ukraine and the €60 billion post-COVID-19 rescue package, has marked a change from Germany‘s traditional reluctance to public spending.

The “debt brake” is in the German constitution and stipulates that annual borrowing must not exceed 0.35% of nominal GDP.

Linder has long championed the principle as one of his priorities amid growing calls from within the coalition to abandon it as long as the many crises suffocate the country.

(Martin Herrera Witzel | EURACTIV.com)

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