The doors are closed: In a retreat, Saxony’s CDU parliamentary group is still discussing the key figures for the double budget 2023/24 until this Thursday. Quasi in front of the doors, an illustrious group lurks for the results: coalition partners, opposition, the DGB, economic researchers. Because at the retreat the CDU makes a decision with far-reaching consequences: does it approve corrections to the debt brake and the necessary amendments to the constitution or not? If the latter were the case, DGB regional chief Markus Schlimbach is convinced that there will soon be “austerity budgets in all areas”.
In 2013, Saxony enshrined its own debt brake in the state constitution, which the CDU, Left, SPD and Greens had negotiated. Budgets are “basically to be balanced without income from loans,” it says there; Exceptions only apply in “exceptional emergency situations”. However, according to Article 95, Paragraph 6, the repayment of the debts must be done “within eight years at the latest.”
For many years it was only a theoretical requirement. Then came Corona. State spending on economic aid, for example, exploded and revenues collapsed – a more than extraordinary emergency. In April 2020, the state parliament therefore unanimously authorized the state government to take out loans of up to six billion euros to deal with the pandemic. However, it soon became clear what serious consequences the small print, speaking: the redemption rule, would have. From 2023 the Free State would initially have to repay hundreds of millions, from 2025 one billion euros annually. With budgets of a little over 20 billion euros, any ability to act would be lost; the red pencil ruled.
A constitutional amendment is therefore being called for from many sides. You have to extend the “ludicrously short repayment period”, ideally to 50 years, says the DGB boss. Joachim Ragnitz from the Ifo Institute in Dresden also proposes a “reformulation” of the debt brake. In the state budget, also because of the changed political emphasis, for example with regard to positions for teachers and police officers, there is a “considerable deficit that is likely to rise,” which under the current rules can only be covered by “spending cuts”, which would have negative consequences for growth.
In parts of the Saxon coalition, the economic researcher runs open doors. The pandemic was the “practical test” for the debt brake, but it did not pass, says Franziska Schubert, the parliamentary leader of the Greens. The mechanism now in force “dramatically exacerbates the situation,” she says – which was never intended. Your SPD colleague Dirk Panter says the debt brake works like an »immobilizer«. The left also criticizes the instrument. She wants to commission an expert opinion that should show what consequences the current debt brake would have and how changed repayment periods would affect. She advocates extending the period to 20 to 30 years. A two-thirds majority in the state parliament and thus also votes from the opposition would be required for a change in the constitution.
Whether this will happen is open. So far, the CDU has insisted on wanting to pay off the corona debts “as quickly as possible”. Your parliamentary group leader Christian Hartmann hopes that the country can get by with 3.3 instead of 6 billion euros in loans. In addition, the November tax estimate for this year and next was more positive than expected. Before the CDU meeting, it was said that prior to the CDU meeting, it was said that prior to the CDU meeting, weighing up whether to agree to a “moderate” extension of the repayment period to possibly 15 years was “in flux”.