Federal government wants to “cushion shocks”
Lindner fears loss of prosperity through war
4/3/2022 4:41 am
Federal Finance Minister Lindner is trying to do a balancing act: although he wants to continue to comply with the debt brake, he promises to use state investments to mitigate the severe economic consequences of the war for German households. Nevertheless, he sees prosperity in this country at risk.
Federal Minister of Finance Christian Lindner anticipates a “loss of prosperity” for the people of Germany as a result of the Ukraine war. “The Ukraine war is making us all poorer, for example because we have to pay more for imported energy,” said the head of the FDP to “Bild am Sonntag”. “Not even the state can compensate for this loss of prosperity.” The federal government will “cushion the biggest shocks”. That is why the broad middle will be relieved, the needy will be supported and the existence of threatened companies will be secured. “But since funding is limited, these measures can only be temporary.”
In view of an inflation rate of 7.3 percent in March, Lindner said: “I have serious concerns regarding economic development. Growth is declining, prices are rising.” The federal government is doing everything to avoid the risk of so-called stagflation. “In the long term we will have to lay new foundations for prosperity. Germany must renew its growth model of a social and ecological market economy.”
The last time the inflation rate in the old federal states was as high as in March was in autumn 1981, when mineral oil prices had also risen significantly as a result of the effects of the First Gulf War. Despite the crises, Lindner wants to comply with the debt brake once more next year as planned. When asked the relevant question, he replied: “Yes. If there is no new catastrophe, the debt brake must be observed.” That’s what the constitution says. “It must be possible to normalize the level of debt before the end of this decade.”
Lindner admitted that she had to “organize enormous funds and take on debt for them”. He works to ensure that the regular budget is solid beyond Corona and the Ukraine war. “I defend the debt brake of the Basic Law.”
