Wake-up call for a new economic policy
BDA AGENDA 25/23 | COMMENT OF THE WEEK | November 30, 2023
Folkmar Ukena, NORDMETALL President and Managing Partner of LEDA Werk GmbH & Co. KG from Leer
That was a tough one: with its ruling, the Federal Constitutional Court has cut at least 60 billion euros from the coalition government's energy and climate bill. This should be a wake-up call to rethink economic policy. After all, one in five companies in the northern German metal and electrical industry is now considering relocating its production abroad. A sad peak in the regular economic surveys conducted by the employers' association NORDMETALL.
Federal Chancellor Olaf Scholz, who is said to have devised the manoeuvre of shifting the coronavirus billions to the Climate and Transformation Fund while he was still Finance Minister, now has a massive problem: there will soon be no money for funding measures to renovate buildings and replace heating systems or to relieve the burden on companies in a huge transformation process. This could have dramatic consequences for our industry, which is particularly dependent on lower energy prices.
So what to do in times of a budget freeze? There are basically five options in this situation:
- Cutting the 60 billion euros elsewhere - this would require a bold review of many expenditures, subsidies and social benefits, but does the Ampel have the political strength to do so?
- Raising taxes - in the current economic situation, that would be poison for companies;
- declare an emergency and thereby undermine the debt brake once again - that would be at least as legally questionable as the reallocation of coronavirus funds;
- abolish the debt brake again - this would require the cooperation of the CDU/CSU. However, it is fighting for the opposite, namely budgetary discipline
- or set up new subsidiary budgets, i.e. special funds, as the German government has already done once with the 100 billion pot for the Bundeswehr.
Before asking where the red pencil should be applied, the question must be asked as to whether the state needs such large sums at all. If the government had not deliberately driven up energy costs beforehand, it would not need billions in aid later on to make them artificially cheaper again. And as long as promised subsidies do not flow out at all because the procedures are too bureaucratic and cumbersome, the pots do not need to be filled as much.
Just a few ideas for solutions:
- Why not increase the energy supply and finally massively accelerate the expansion of renewable energies - after all, the LNG terminals have already succeeded?
- Why do we need a highly controversial heating law when emissions trading can achieve the same CO2 savings at a fraction of the cost?
- Why not invest in science and research - it worked once before during the coronavirus crisis and produced an effective vaccine in a very short time?
The Karlsruhe ruling offers the opportunity to protect the climate without triggering a sovereign debt crisis at the same time. To do this, however, the traffic light government must heed the wake-up call of the Constitutional Court and put an end to its misguided economic policy.
NORDMETALL is the employers' association for 270 companies in the metal and electrical industry in Hamburg, Bremen, Schleswig-Holstein, Mecklenburg-Western Pomerania and north-western Lower Saxony. These include machine and ship builders, the aviation and automotive industries, steel producers and specialists in medical and electrical engineering. NORDMETALL speaks for a key industry in the north with around 130,000 employees.
