Enlarge image
Finance Minister Lindner (FDP)
Photo: CLEMENS BILAN / EPA
The greatest threat to our prosperity at the moment is inflation.
The inflation rate was just under eight percent in August.
There is no improvement in sight for the time being.
The economic research institutes are already forecasting inflation rates of around nine percent for the coming year.
Inflation means that entrepreneurial risks are avoided and investments are avoided.
It is an impoverishment program for broad sections of society.
My first priority is therefore to fight inflation.
Otherwise, inflation would erode our economic foundation and damage our social cohesion.
In order to get the high inflation rates under control, the European Central Bank (ECB) has raised the key interest rate sharply.
However, the effect of such a rate hike would be limited if fiscal policy were to go in the other direction at the same time.
Monetary policy and financial policy must not contradict each other right now.
The Federal Government and the ECB must work independently of one another, but effectively hand in hand.
It's a misconception that we can control inflation with more debt.
There is no doubt that there are major tasks that also need fiscal support.
The debt brake does not prevent this, but it forces us to prioritise.
This will make fiscal policy more restrictive overall.
Not every project in the coalition agreement, no matter how sensible it may be, justifies an exception to the debt brake in the current situation.
We must recognize that we must adapt our actions to the new realities.
Only if there is a sudden, unforeseeable external shock would an exception to the debt brake be the ultima ratio.
Immediately after the start of the Ukraine war I had to use such an exception.
I have presented a supplementary budget to finance the reception of refugees, to help Ukraine and to cushion the very acute consequences of the crisis.
more on the subject
Price explosion, company deaths, fear of relegation: black-red-cold
Lower Saxony's FDP top candidate Stefan Birkner: "We're not doing a traffic light campaign" An interview by Severin Weiland
Debate about the earnings of top personnel: Lindner calls for salary caps at public broadcasting
State elections in Lower Saxony: How the FDP is fighting against relegation Christoph Schult reports from Oldenburg
Trying to solve every situation with new debts cannot be the solution.
Germany should also be a role model in Europe here.
In Europe, too, we will not get inflation under control by repeatedly suspending the fiscal rules.
It would be counterproductive to constantly compete for scarce resources with new public demand programs.
Rather, we in the EU must abandon the expansive fiscal policy and come to solid and sustainable public finances.
During the corona crisis, we experienced a demand shock.
Here the state compensated for a lack of demand with tax money.
Today we have a shock on the supply side.
In times of scarce offers, we have to increase them with ambitious measures.
In the energy sector in particular, we have to pull out all the stops to achieve this.
This includes bringing all of the capacities that are available to us online in the electricity sector – including power plants that run on coal or nuclear.
In addition, we urgently need investments to advance the digital and climate-neutral transformation.
As a federal government, we are therefore investing more than previous governments, while complying with the debt rules.
Protecting the productive substance of our economy must now be our premise.
Especially in times of inflation we have to avoid additional tax burdens.
We are fully compensating for cold progression.
This is how we prevent the state from becoming the winner of inflation.
We strengthen the purchasing power of people and companies.
We support companies that are particularly affected by the massive increases in energy prices with direct grants.
We must not pour tax money out with the watering can.
Instead, we have to prevent structural breaks with targeted help.
The effective use of public funds is crucial here.
If we do our job well, we avoid inflationary impulses and stabilize and increase production potentials that allow an expansion of supply.
That has a price-dampening effect.
more on the subject
Now it's hitting the middle class too: How inflation is knocking out saversBy Tim Bartz
There are voices that suggest that debts have become socially acceptable anyway and that the financial consequences of the war can be casually financed through loans or higher taxes.
To them it should be said: We are not just facing a year of fiscal efforts, but a decade.
Therefore, we must not fall into short-sighted comfort now.
We cannot pull the exception to the debt brake every year because crises are piling up.
We cannot work on credit all the time.
We should comply with the debt rule precisely because it imposes an effort on us, because it represents a wise limitation on political spending desires.
In this way, we are not driving inflation further and at the same time ensure the long-term sustainability of our public finances.
