It’s an expensive night for today’s and tomorrow’s taxpayers. While government leaders on coalition committees gave the green light to the new Germany Fund as an umbrella for all kinds of state-backed private investment and held out the prospect of further electricity subsidies for industry, the black and red budgets once again ran on financial gas.
This makes nightly “cleaning sessions” before the next budget is passed fun. Thanks to the debt brake no longer functioning properly, an additional eight billion euros was allocated to the core budget, also for the purpose of providing greater support for the nursing care fund. Together with loans from “special funds”, the federal government will authorize around 180 billion euros for new schools by 2026.
Lack of insight and will
Even more so during the corona pandemic. Currently, such large funds are needed to overcome acute and unpredictable emergencies, and also serve to stabilize a weak economy and overly large social security funds. The Chancellor and Vice Chancellor tirelessly ensure that the coalition continues to strive to strengthen competitiveness. But these statements ring hollow because something important is missing: understanding and the will to improve the coalition agreement at key points and ultimately follow up the announced “autumn of reforms” with action.
To regain a foothold in international competition, subsidies for individual sectors do not help much. It will be more important to address the state causes that lead to high location costs, whether outdated infrastructure, errors in the energy transition, social policies and regulations. But most of these large loans have not flowed into investments that would permanently strengthen Germany’s growth potential.
This becomes a lubricant for the cohesion of a coalition that is unable to clearly prioritize money and political power in the interests of a better future. Nothing illustrates the federal government’s incompetence better than the planned retirement package, which would spend huge amounts of money on higher statutory pensions – as opposed to quickly lowering corporate tax rates and social security contributions to competitive, performance-friendly levels.
