German finance minister cuts lonely figure backing debt brake

THE German finance minister is sticking to his plan to return to the nation’s constitutionally enshrined debt brake - even if it is a lonely position, he says.

“According to the current state of things, this is not only possible but also imperative,” Christian Lindner said on Thursday (Sep 22) at an insurance industry conference.

However, he said a further suspension of the borrowing limits - first set aside to allow state support during the Covid-19 pandemic - could be a “last resort” in the event of some unforeseen, catastrophic development beyond the state’s control.

Germany must not make a norm out of this, Lindner said, adding “even if it makes me feel a little lonelier”.

Lindner has previously said planned relief measures were possible within existing budget plans for 2022 and 2023 as inflation has recently given the state high tax revenues.

However, the costs are mounting for Europe’s largest economy to support households and businesses struggling with skyrocketing energy bills and some traditional supporters of the debt brake have raised questions about it given exploding energy costs.

A plan to prop up Uniper, for example, will now cost the government 29 billion euros (S$40.5 billion) after it moved to nationalise the troubled importer of Russian gas on Wednesday. REUTERS