The Greens parliamentary group wants to spend an additional 30 billion euros. “We need an investment stimulus for the economy, jobs and climate,” said Katharina Dröge, one of the two chairmen. Her deputy Andreas Audretsch pointed out that governments around the world are investing. Germany cannot afford to hesitate and remain on the sidelines.
In a four-page paper, the parliamentary group leader proposes, among other things, higher state subsidies for social housing and energy-efficient building renovation. The subsidized industrial electricity price that has been demanded for months by Economics Minister Robert Habeck (Greens) also appears. The Greens want to “significantly expand” the climate investment bonus in the draft of the Growth Opportunities Act by Finance Minister Christian Lindner (FDP).
The ideas in detail are less likely to cause explosiveness within the traffic light government than the proposal as to how they should be financed. For the parliamentary group leader of the Greens, the matter is clear: “We ensure the financing in particular through the Economic Stabilization Fund (WSF),” says the paper.
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Bond market anomaly
The sentence contains not only political but also legal explosives. Because whether unused loans from the 200 billion euro pot that the coalition set up last year to stabilize gas and electricity prices can be used for other purposes is legally controversial.
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According to general estimates, at least a high double-digit, if not even a three-digit billion amount will be left after the end of the gas and electricity price brake in spring 2024. By the end of June, 60 billion euros had flowed out of the WSF.
The Greens parliamentarians argue that the economic downturn is due to the energy crisis. The measures served “to cushion the consequences of the energy crisis, in particular price increases when purchasing gas and electricity in Germany,” says the paper.
Greens see the energy crisis cushioned by renovations
The words were obviously chosen with care, they are also in the Stabilization Fund Act, in paragraph 16 paragraph 4, in which the purpose of the fund is described.
The Greens parliamentarians therefore consider it justified that 30 billion euros are used for energy renovation, for example. The argument: The consequences of the energy crisis can also be cushioned by private households and companies consuming less energy.
Finance Minister Lindner sees it differently. For weeks he has been resisting unused credit authorizations being used for other projects. It was never intended to use all of the funds, he said when presenting the draft budget in July, citing legal arguments. “If the funds were to be used again, we would have to change the law,” he said.
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Oil, pellets, coal and Co.
From the point of view of the lawyers at the Ministry of Finance, it is not enough to subsequently add further measures to Section 26a of the Stabilization Fund Act. Rather, the Bundestag must again determine an “extraordinary emergency situation” within the meaning of the Basic Law.
After all, the exception to the debt brake enshrined in the Basic Law was decided on based on assumptions. “Subsequently ‘substituting’ a different basis of reference would deprive the decision of the German Bundestag of its legitimacy,” says the ministry.
The Bundestag would have to make “a completely new decision” for 2023. According to Lindner, there is no reason for the renewed identification of an emergency situation. In his view, a slight contraction in the German economy is not enough to suspend the debt brake again, he said several times.
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Upcoming “multi-crisis”
The Ministry of Finance points to the danger of renewed constitutional lawsuits if the WSF law is changed and funds are reallocated. In June, the 60 billion euro supplementary budget for 2021 was negotiated in Karlsruhe. At the beginning of 2022, corona aid was quickly converted into climate aid. The CDU/CSU parliamentary group had complained about this. The judgment of the constitutional judges is expected by the end of the year.
The Federal Government’s representative in the proceedings is Alexander Thiele, Professor at the Business & Law School in Berlin. His task is to defend the supplementary budget in Karlsruhe, which was mainly passed at the instigation of the SPD and the Greens. At a Bundestag hearing on the subject in January 2022, he appeared as an expert at the invitation of the Greens.
Regarding the Greens’ new plans to use the unused WSF funds for an “investment stimulus for the economy, jobs and climate”, he says: “For the credit authorizations in the amount of 200 billion euros, a subsequent change of purpose without the determination of a new emergency situation – So the notorious ‘suspension’ of the debt brake – not possible.”
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Significant deterioration
The decisive question, however, is the answer to which the judges in Karlsruhe are currently deciding in connection with the supplementary budget: Is there a change in purpose at all? It is clear from Thiele’s point of view that the entire loan funds may only be used for the purposes provided for in paragraph 26a. “At first glance, it seems reasonable to include the introduction of an industrial electricity price,” he says. He does not comment on the other points in the Green proposal.
Constitutional lawyer Joachim Wieland from the German University for Administrative Sciences in Speyer has a similar view of the possibility of at least financing an industrial electricity price via the WSF. He also considers a new determination of an exceptional emergency situation to be unnecessary. The industrial electricity price planned by Economics Minister Habeck is intended to support energy-intensive German industry in overcoming the major challenges caused by the Russian war of aggression against Ukraine and the resulting energy crisis.
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“With this objective, an industrial electricity price that is to be subsidized with credit-financed funds from the Economic Stabilization Fund falls within the range of measures that, according to the Bundestag resolution, may be financed by taking out loans,” says Wieland, who, together with Thiele, supported the federal government in the supplementary budget -proceedings in Karlsruhe.
The law states, among other things, that expenditure from the WSF is permissible for “financing and interim financing of programs to cushion price increases when purchasing electricity, in particular by consumers and companies”.
How narrowly this legal definition of an electricity price brake must be interpreted or how broadly it can be interpreted should be examined more closely for the industrial electricity price, says Thiele. So far he has not done so, which is why he only wants to comment very cautiously on the legality of the Greens’ funding proposal. So the last word on the use of the unused funds in the WSF has not yet been spoken.
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