Is lifting the debt brake against the oath of office? – DW – 11/09/2024

In the end, German Chancellor Olaf Scholz and former Finance Minister Christian Lindner agreed on only one point: Their cooperation failed due to the debt brake.

Scholz had wanted to suspend this limit on Berlin’s ability to borrow in relation to the country’s economic output in order to meet the demands of the struggling economy. But Lindner insisted that this situation should continue, citing the oath he took when he became finance minister in 2021.

Claim: Lindner, in a statement after being dismissed by Scholz on November 6, said: “The Chancellor requested that I suspend the federal debt brake. I could not agree to this because I would have violated my oath of office.” A two-party coalition government with the Greens.

DW accuracy check: Misleading

The debt brake was not part of Lindner’s oath of office. The leader of the neoliberal Free Democratic Party (FDP) made the following oath when he was sworn in as finance minister in the German Bundestag on December 8, 2021: “I swear that I will devote my strength to the welfare of the German people, increase its benefit, prevent its harm, uphold the Constitution and Uphold and defend the laws of the Federation, diligently fulfill my duties and give justice to all.

The oath of office does not contain any specific obligation regarding debt relief. However, the German Constitution refers to the Basic Law; This article states in Article 115 that “revenues and expenditures will in principle be balanced without revenues from borrowing”; roughly speaking, the state can only spend as much money as it receives. inside.

Aid to Ukraine ‘hard to justify’

While individual states are subject to an absolute ban on borrowing, the federal government is allowed to borrow a maximum of 0.35% of economic output. For example: In 2022, gross domestic product was approximately €3.88 trillion ($4.07 billion); This means that the federal government is allowed to borrow approximately €13 billion in additional debt.

But let’s get back to Lindner’s claim that removing him from office would violate his oath of office. “There is room for interpretation here,” said Friedrich Heinemann, professor of public finance at the Leibniz Center for European Economic Research.

“According to the decision of the Federal Constitutional Court in November 2023, Lindner claims that debt-financed aid to Ukraine is now difficult to justify under the Basic Law,” he told DW, referring to the decision invalidating the budget law that authorized Berlin. “It can,” he said. Borrowing in response to the COVID-19 pandemic. The court said the law did not meet constitutional requirements for emergency borrowing.

Heinemann said it was “possible to view that he was forced to violate the Basic Law,” which, in his interpretation, would also be contrary to Lindner’s oath of office.

Budget law is the province of the Bundestag

Finance in the Bay does not directly decide on the suspension of the debt brake. This is the task of the German Bundestag, the lower house of parliament that implements budget law. Lindner’s task as finance minister would be to submit a draft budget to be voted on by its members.

In 2022, citing the “extraordinary emergency”, the Bundestag decided to borrow hundreds of billions of euros through the aforementioned budget law, taking advantage of the debt brake exception, as it did in the 2020 and 2021 fiscal years. As a result of the COVID-19 pandemic and the war in Ukraine.

In principle, the Basic Law allows the suspension of the debt brake “in case of natural disasters or extraordinary emergencies beyond the control of the government.”

During the 2024 budget debate, Scholz’s center-left Social Democratic Party and the environmentalist Greens once again called for a declaration of emergency due to the consequences of the war in Ukraine and the ensuing energy crisis.

But experts think this is a difficult argument. Financial constitutional law expert Stefan Korioth from the University of Munich told the Berlin newspaper: Der Tagesspiegel such an emergency would have to be a “shock-like event from outside that is uncontrollable and significantly disrupts the financial condition of the federal government.”

The consequences of the war in Ukraine may well be used as justification, “but some time has passed since the war began, and as time goes on it becomes increasingly difficult to explain why the German state is under an extraordinary burden at the moment,” Korioth said.

Solution: Scholz urged Lindner to lift the debt brake, but not to directly violate his oath of office. Still, the oath of office is subject to interpretation. It remains unclear whether such a planned suspension of the debt brake will be canceled again by the Federal Constitutional Court.

This article was originally written in German.