(de-news.net) – Markus Lewe, President of the German Association of Cities, advocates for reforming the debt brake, contending that the future federal government must reconsider the debt brake if it impedes essential future investments. Lewe underscores a municipal investment backlog exceeding 186 billion euros, affecting school and road renovations, and the acquisition of new buses and trains. He emphasizes the necessity for substantial funds to render cities climate-neutral and urges that the debt brake should not obstruct these investments. Lewe calls for greater support from the federal and state governments.
Federal Finance Minister Jörg Kukies (SPD) asserted that future financing of infrastructure and defense investments without reforming the debt brake, solely through budget savings, is unrealistic. He acknowledged the positive impacts of the debt brake but highlighted the significant investment backlog in bridges, kindergartens, and schools. Kukies called for at least 30 billion euros more per year from the federal budget by 2028. Kukies stressed that setting budget priorities is essential, as even targeted debt brake reforms will not create unlimited fiscal space. He urged all parties to propose solutions for financing crucial future investments, including increased defense spending.
The Union parties plan to include a relaxation of the debt brake for the federal states and do not rule out a higher top tax rate in their election program. CDU Secretary General Markus Linnemann emphasized the need for flexibility for the states, similar to the federal government. Jens Spahn excluded easing the debt brake for higher subsidies, while Gitta Connemann and Dennis Radtke (all three CDU) supported reforms for future investments. Regarding tax policy, the Union parties aim for significant relief but do not exclude a higher top tax rate. Leading CDU politicians welcome the debate on moderately increasing the top tax rate to relieve the middle class.
The SPD as a whole is focusing on massive state investments and reforming the debt brake in its own election campaign. According to a nine-page report, the current debt brake regulations are too rigid and do not meet contemporary challenges. Party leader Lars Klingbeil emphasized the need for a new financial policy to mobilize necessary funds for a new economic upswing. Reforming the debt brake requires a two-thirds majority as it is enshrined in the Basic Law. SPD faction leader Rolf Mützenich sought a cross-party consensus but faced opposition from the FDP and Union. The SPD proposes three pillars for financial policy reform, ensuring that investments in future viability, prosperity, and the lives of future generations are not fully subject to strict debt limits. They also aim to adjust the credit limits and the emergency rule, allowing the state to authorize credits for several years in advance during crises. Additionally, the SPD wants to reassess the economic potential to better reflect the economy, including increasing women’s employment.
In this sense, SPD leader Saskia Esken also called for a systematic reform of the debt brake, arguing that merely adjusting figures is insufficient. Esken strongly highlighted the necessity of addressing multiple challenges simultaneously, including infrastructure and education, without prioritizing defense spending over other areas. Esken defended Chancellor Olaf Scholz’s promise of no cuts, advocating for a focus on strengths like innovation, infrastructure, and social partnership. She stressed the importance of supporting families, increasing women’s employment, and improving education, without resorting to austerity measures.
