Germany’s Federal Audit Office declared the government’s energy rescue package “unconstitutional” on Tuesday, adding to the 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 shield its citizens and businesses from rising energy prices is proving a hard pill to swallow for FDP-Chief and – nominally – frugality champion Lindner, who is facing backlash from the conservative CDU and within his ranks.
The proposed energy rescue package is to be financed by a special fund, with loans to be taken out in the current year while payments are to be rolled out until 2024. It, therefore, poses, according to the Auditors, in essence, borrowing “in stock” and thus violating national budget rules.
“The proposed borrowing ‘in stock’ violates the constitutional principle of annuality”, the opinion of the Court of Auditors reads. Instead, it advocates for the rescue package to be financed with the normal federal budget without detours.
The proposed energy shield is the latest in a series of “extraordinary” investment packages forwarded by the coalition government and approved by Lindner since he took office in December last year.
The budgetary spokesman from the conservative CDU, Christian Haase, commented on the Federal Audit Office’s report saying, “we cannot go along with the traffic light [German coalition government] financing route. We cannot simply ignore the aspect of unconstitutionality”, the CDU-Parliamentarian told the Handelsblatt.
This, together with Scholz’s extraordinary € 100 billion defence fund following the Russian invasion of Ukraine and the post-COVID-19 bailout worth €60 billion, has marked a shift from Germany’s traditional reluctance to public spending.
The “debt brake” is featured in the German constitution and stipulates that annual borrowing shall not exceed 0.35% of nominal GDP.
Linder has long championed the principle as one of his priorities amid increasing calls from within the coalition to scrap it for as long as the numerous crises have the country in a chokehold.
(Martín Herrera Witzel | EURACTIV.com)
