Stop the Debt Brake!

Petition an …

• the Chancellor of the Federal Republic of Germany Olaf Scholz
• the Federal Minister of Economics and Climate Protection Robert Habeck
• the Federal Minister of Finance Christian Lindner
• the chairman of the SPD parliamentary group Rolf Mützenich
• the chairpersons of the Bündnis 90/Die Grünen parliamentary group Britta Haßelmann and Katharina Dröge
• the Chairman of the FDP parliamentary Group Christian Dürr

Dear Ladies and Gentlemen,

our country is facing enormous challenges: There is the COVID-19 pandemic that has been rampant for two and a half years, the worsening climate emergency, the increasing social inequality and the accompanying rejection of democracy in some parts of society, or most recently the deteriorating global security situation due to the Russian war of aggression against Ukraine as well as record-breaking inflation – we are experiencing a polycrisis of mutually reinforcing, partly conditional, worrying developments that are already directly burdening the population and darkening future prospects.

The German public, we are convinced, is very aware of the scope of these challenges. Be it physicians and medical professionals who are concerned about the supply of and barrier-free access to COVID-19 tests. Farmers who — assuming this summer’s drought hasn’t ruined their crops anyway – are struggling to cultivate their fields because the price of artificial fertilizer has skyrocketed. Municipalities that have to take in and accommodate war refugees with tight budgets. Small and medium-sized businesses in the energy-intensive industry that are on the verge of insolvency because of the enormously increased costs for electricity and gas. People from lower income brackets, but also large parts of the middle class, whose livelihoods are becoming more difficult to manage month after month due to horrendous price increases.

You and your colleagues in government and parliament never get tired of emphasizing how important solidarity and social cohesion are in times like these. Fundraising and appeals to save energy or reduce personal carbon footprints, however well-intentioned, fall flat unless they are flanked by measures that go beyond a focus on personal responsibility and individual contributions to tackling global problems. The relief packages you have launched so far give a flavor of the contribution that is possible and necessary from the state side to support citizens financially and keep the economy running – but they are insufficient.

We are eagerly watching the current budget debates in the German Bundestag. There is a lot of talk about relief, transformation and catching up, for example in the energy transition, the heat transition and digitisation. Your coalition seems to be well aware of the challenges mentioned. Because of that, it is all the more irritating for us that, despite all the ambitious rhetoric, you want to stick to the debt brake provided for in the German constitution from next year onwards. In order to achieve this goal, you are already calculating with about 10% less funds for the 2023 federal budget compared to this year. However, the restrictive fiscal policy that thus emerges is exactly the opposite of what would be necessary to respond adequately to the polycrisis with its manifold negative effects.

The rapid suspension of the debt brake at the outbreak of the pandemic enabled the state to pay for short-time allowance schemes and subsidies, purchase tests and vaccines, and build up the health infrastructure needed for their use. In a situation where the state had to prove its ability to act, this was only possible by the Bundestag lifting the requirement to limit new public debt. We believe that a rule that has to be suspended to ensure state action in times of crisis is not flexible enough for our present and should be abolished. Insofar as this is not feasible with the current majorities in the Bundestag and the Bundesrat, we demand of you instead: With the government majority in the Bundestag, once again declare an “exceptional emergency situation” (Art 115(2) GG) and suspend the debt brake until further notice. Stop the debt brake!

Hardly any of the problems currently threatening our polity will become smaller in the foreseeable future. COVID-19 caseloads are already on the rise again and are expected to reach a new peak in the expected winter wave. Many tenants of natural gas-heated flats will fall into poverty through no fault of their own as soon as the adjusted energy bill lands in their letterbox. Those who are already living below the poverty line will soon be facing the existencial ruin, at least in financial terms. And every additional gram of CO2 emitted by old oil and gas heating systems, which should have been converted to heat pumps long ago, is one too many, further heating up our planet and making natural disasters even more likely. The debt brake stands in the way of a solution to these problems – that is why it must be stopped.

In reality, the constitutional debt rule does not slow down debt or deficits, but creates and abets them. Deficits in education, in the healthcare system, in the digital and transport infrastructure, in the labor market and in the environmental sector. A moral debt of failure to help and of negligent inaction towards those left behind by austerity policies. This is the real debt we are leaving for future generations. What the so-called debt brake actually slows down, on the other hand, is research and development, construction activity and state services, environmental and climate protection, in short: public investment and resulting prosperity. So in reality, it is a brake on investment and prosperity.

With your announcement that next year you will again comply with the misguided requirement of a more or less balanced national budget, Germany stands quite alone in Europe – the fiscal rules of the Stability and Growth Pact that normally apply in the EU will reasonably remain suspended in 2023. Instead of insisting on compliance with inappropriate deficit and debt ceilings at both the national and European level, you should be making major political efforts that strengthen European integration and develop our monetary union into a genuine fiscal union. Only with the combined strength of Europe’s economies, untroubled by artificial restrictions on government spending, can the polycrisis be overcome in unison and a good life ensured for all. Do what is necessary for this: stop the debt brake before the end of this year in the Bundestag!

We know that suspending the debt brake alone will not make any of the social, economic or climate challenges disappear overnight. In addition to much more fiscal space, Germany needs tax and distributional justice, efficient administration, transparency and functioning accountability processes for public spending. Overcoming legal hurdles such as the debt brake, however, is an indispensable prerequisite for the success of any serious effort to politically shape the challenging transformations we are facing as a society. Common sense dictates that we be prepared. It is in your hands: either a future without a debt brake, or a debt to the future.