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Scholz and the black zero: Fatal Fetish


Despite the collapse of the economy and additional spending on climate protection, Finance Minister Olaf Scholz clings to the black zero. His draft budget is incomplete - and shortsighted.


Rarely, an error by repetition is correct. For the third time he brings now a federal budget, "gets along without new debt," said Finance Minister Olaf Scholz (SPD) on Tuesday before the Bundestag. It took him just twelve seconds from the beginning of his speech to the oath of allegiance. As always, he avoided the stimulus vocabulary of "black zero". Because of the political color scheme - black is the color of the Union - he leaves it to the coalition colleagues of the CDU and CSU. Nevertheless, everyone knew at the opening of the parliamentary debate about the budget of the next year, what was meant.

Also in the coming year, the government wants to chase after their well-known fetish again. It does so without compulsion, because the frequently criticized debt brake would allow it one, albeit small, new debt. Scholz should use that, if only because the economy is weakening, unlike in previous years. In such a situation, the German economy can use any kind of boost, no matter how small.

Trophy for the governing parties

Much would also simpler if Scholz, for example, with ten billion euros in the dispatch, but Scholz wants to know nothing. He may not be the first to voluntarily give up the well-balanced household that is popular among the population. In addition, CDU and CSU cling to the goal because it is one of the few trophies that both parties can claim for themselves.

But with each year in which the federal government upholds the black zero, it discredits the debt default of the Basic Law ( see "rules of debt- making " in the box below ) a little more. She did not deserve that. Without this instrument, which would allow the Confederation maximum new borrowing of 0.35 percent of economic output regardless of the economic cycle, it would never have come to black zero. With the extensive debt prohibition it also slows down the tendency of politicians, for example, to finance social benefits on credit.

The rules of debt making

debt ceiling

"The budgets of federal and state governments are in principle to be compensated without income from loans", says Article 109 of the Basic Law. In the future, the federal states will no longer be allowed to make indebtedness independent of the economic cycle, while the federal government will limit it to 0.35 percent of the gross domestic product.

Valid since

For the federal government since 2016, for the states from 2020 onwards.


The debt brake has constitutional status. In economic crises or emergencies such as a natural disaster, the debt may be higher. But there must be a binding plan for the repayment of the loans.

Debt scope for Germany (measured by GDP 2018)

For the federal government about 12 billion euros.


So far, the federal government has kept the debt brake.

Maastricht criteria

The convergence criteria of the Maastricht Treaty must be met by countries wishing to adopt the euro. According to this, the new debt (deficit) may amount to a maximum of three percent and the total debt to a maximum of 60 percent of the gross domestic product. Thanks to the Stability and Growth Pact (SGP), these guidelines must be adhered to even after joining the euro.

Valid since

1993 (Maastricht Treaty) and 1999 (SWP)


Although the Maastricht criteria are enshrined in EU law, they have often been violated. The EU Commission has therefore launched numerous so-called deficit procedures, but without financial consequences.

Debt scope for Germany (measured by GDP 2018)

Nearly 102 billion new borrowing and a good 2 trillion total debt


Germany violated early against both rules. In recent years, however, Germany has always complied with the deficit burden. The total debt falls in 2019 for the first time in 17 years again below 60 percent.

fiscal Pact

The Fiscal Compact was adopted as a tightening of the Stability and Growth Pact, which was unable to prevent the European debt crisis. Instead of only meeting the three percent limit of the Maastricht criteria, the signatories of the fiscal compact should aim for balanced budgets in the medium term. The indebtedness of the general government, which is independent of the economic situation, may amount to a maximum of 0.5 percent of the gross domestic product. If the total debt level is well below 60 percent, this limit increases to 1.0 percent.

Valid since



The signatory states must anchor their goals in the constitution, as Germany has done with the debt brake. The Fiscal Compact provides for the first time the possibility of financial sanctions for non-compliance. So far, this possibility has not been used.

Debt scope for Germany (measured by GDP 2018)

Nearly 17 billion, as long as the total debt is over 60 percent.


So far Germany has complied with the debt rules of the Fiscal Compact.

Black zero

If government revenue and expenditure are the same, the bottom line is the proverbial black zero. New debts are not necessary in this case. We also speak of a balanced budget.

Valid since



The black zero is not a legal requirement. As a common goal of the Union and the SPD, however, it finds itself in the current coalition agreement.

Debt scope for Germany (measured by GDP 2018)



For the first time in 45 years, the black zero was reached in the federal government in 2014 and has been held ever since.

At present, the federal budget is also facing enormous challenges, irrespective of the uncertain economic cycle, which can lead to gaps in planning. The intended investments to protect the climate are not even included in the draft budget. As usual, if you do not have a plan but want to do great things, tonnage thinking rules according to the motto "Much helps a lot."

Debt brake take literally

The ministries have registered more than 30 billion euros for climate protection measures over the next five years. Scholz's job now is to stamp out the exuberant wishes of his colleagues, so that no new debt is needed. If he allowed himself the leeway of the debt brake, it would be much easier for him. Although the new spending will be offset by additional revenue from a climate levy, no one knows when it will be due or how it will be collected. The coalition will only end its climate package at the end of September.

  • Either way, for the treasurer, it might be helpful not to ignore economic considerations in his efforts to maintain a healthy climate and sound public finances. Scholz faces the task of achieving a given goal with the least possible effort. More concrete: If he was faced with the decision to save a million tonnes of carbon dioxide with a measure that costs two billion euros, or with one for four billion euros, then he should opt for the cheaper version, regardless of the wishes of his cabinet colleagues.

  • Also, the thought could be worth considering that climate protection does not necessarily always have to cause costs. But on the contrary. Some state spending promotes carbon dioxide emissions. That's why environmentally damaging subsidies are the first to be put to the test. This starts, for example, with subsidies for oil heating and stops at the commuter tax. Such a measure would have two beneficial effects: it reduces greenhouse gases and increases financial flexibility.

  • Finally, Scholz should resolutely resist the grossest economic tricks that seem to bring any effort for the big hit inevitably with it. These include, for example, the proposal by Minister of Economics Peter Altmaier (CDU) to found a state-run climate foundation. It is to mobilize 50 billion euros for climate protection via a bond with a coupon of two percent.
    The idea could have been taken directly from a textbook from the Hogwarts Business School for Economic Sorcerer's Apprentices. Why should a state foundation lend money for two percent if the state itself could borrow the same amount for less than zero percent? The federal budget would have to pay for the interest. Altmaier's proposal has only one merit: It shows what grandiose miscast occupation currently provides the office of Federal Minister of Economics.

Scholz was not to be a role model for him.

Source: spiegel

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