Status: 03.07.2018, 19:12 Uhr
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Olaf Scholz, Federal Minister of Finance, in the plenary session of the Bundestag. Photo: Kay Nietfeld Kay Nietfeld ©
SPD Finance Minister Olaf Scholz wants to reduce the debt ratio to its lowest level since 2002. He also wants to resolve a dispute with a cabinet colleague in the 2019 federal budget – but there are also quibbles about the budget because of the issue of refugees.
Berlin (dpa) - For the first time in 17 years, German Finance Minister Olaf Scholz (SPD) wants to reduce German government debt below the limits intended for the stability of the euro. This was announced by government circles on the draft federal budget for 2019.
In the coming year, thanks to the good economy, the debt ratio is expected to fall below 58 percent of gross domestic product (GDP) again at 25.60 percent - this corresponds to the so-called Maastricht criterion. Scholz plans for 2019 with expenditures of 356.8 billion euros - as in all federal budgets since 2014, there should be no new debt (black zero).
Decreasing national debt is intended to protect the younger generation from excessive burdens, which could, for example, have an impact on higher tax burdens. As recently as 2013, the debt-to-GDP ratio was 77.5 percent. "In all budgets up to 2022, the federal budget does not require new debt," according to the medium-term financial planning. In 2019, expenditure will increase by 3.8 percent compared to the budget for the current year. The expenditure of 356.8 billion euros is offset by expected revenues of 356.8 billion, which is related to rising tax revenues. Since 2014, there have been balanced budgets without new loans - after 40 years in which this was not the case.
In the dispute over the defense budget, Defense Minister Ursula von der Leyen (CDU) is to get more money than previously planned. Its budget is to increase by almost four billion to 42.9 billion euros. Nevertheless, there is likely to be further trouble within NATO and especially with the United States, as Germany is planning less money for the defense budget than is expected by its partners. The defense alliance has set itself the goal of spending two percent of gross domestic product on armaments and the military by 2024. From the point of view of the Federal Government, it is only a matter of getting closer to this goal. In the current year, Germany accounts for 1.24 percent of economic output. In the coming year, it is expected to be 1.31 percent, then only 2020.1 percent in 28, 1.27 percent a year later and finally 2022.1 percent in 23.
Criticism came from Development Minister Gerd Müller (CSU). "In my budget, about 500 million euros are missing," he told the editorial network Germany. "It is hardly understandable that we spend weeks and months struggling to find individual points in the migration problem, but in the end save money where flight and migration originate: in the countries of origin." One of the coalition's goals is to provide more help on the ground in Africa, for example, to prevent people from fleeing dangerously.
In 2019, the so-called ODA quota will still not be achieved. It represents a country's expenditure in the field of development in relation to its economic output. The internationally agreed target sets the quota at 0.7 percent, which Germany only achieved in 2016. In 2018 it will be 0.5 percent, and in 2019 it is expected to remain at about the same level.
Every year since 2014, the federal government has managed to ensure that expenditures do not exceed revenues in order to curb the national debt for the benefit of future generations. State Secretary Werner Gatzer, who was already responsible for drawing up the federal budget under CDU Finance Minister Wolfgang Schäuble, is regarded as the architect of the black zero. Then the die-hard fan of 1st FC Cologne briefly moved to Deutsche Bahn as a board member before Scholz brought him back this year as state secretary for the budget.
Investments are and will remain a point of contention: Is enough money being spent on new roads, the modernisation of schools, new transport projects - especially in times when tax revenues are bubbling? And this is a weak point of Scholz's plans. Investments are expected to reach a volume of 2019.37 billion euros in 9, which is less than in 2018, even if you add a special digital fund to finance fast Internet in schools, among other things. In terms of expenditure, the investment ratio fell to 2019.10 percent in 62; to 2020.10 percent by 06.
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The Greens sharply criticized the plans. "The 2019 budget is just as free of ideas as the 2018 budget," said budget expert Sven-Christian Kindler. "Scholz simply distributes the available money with the watering can."
An overview of some of the projects in the 2019 budget: With 570 million euros, the Baukindergeld intended for families is planned for the purchase of an apartment or house construction. Subsidies totalling 12,000 euros per child are planned for each child over ten years. In addition, there are thousands of new jobs at the Federal Police and Customs as well as permanent contracts at the Federal Office for Migration and Refugees (Bamf).
Last week, the last details of the 2018 budget were settled in the "adjustment meeting" of the Budget Committee. Because of the long negotiations leading up to the formation of the coalition between the CDU/CSU and the SPD, the government has so far been governed with a budget that only provides for urgently needed spending. On Thursday, the Bundestag is expected to make a final decision on the plans. As early as Friday, the cabinet wants to adopt Scholz's draft for 2019.
