GThere is nothing for free – not even for the federal government if it runs into debt. Dreams that the state can stack credit on credit without significant strain have turned out to be just that – now it’s time to wake up. The time of negative interest rates is over. The capital market has been rising rapidly since March, and in just a few months the 2014 level was reached again. The federal government had extremely low interest costs for some time — not least because it was able to sell bonds at a premium.
The so-called agio effect has reached a two-digit billion amount in each of the past two years. But that is over now. On the other hand, refinancing costs will rise sharply next year. With an expected 30 billion euros, the federal government is back where it was ten years ago. It doesn’t have to stay that way. Older semesters may remember: In 2008, the federal government’s interest payments amounted to more than 40 billion euros – with a significantly lower level of debt.
The pandemic hit hard financially. In an emergency, it was right to suspend the debt rule. Unfortunately, every discipline has gone with it. The federal government planned and borrowed like there was no tomorrow. Almost 500 billion euros in just three years is a huge sum. The special debts for the Bundeswehr are not even taken into account. The federal government already has to serve 1.5 trillion euros.
So it is time to let the debt brake from the Basic Law take effect again, as Finance Minister Christian Lindner is planning. He rightly points out that, in terms of budgetary policy, one can hardly speak of an emergency if the economy is growing properly. Expected tax revenues will also increase significantly. In the first five months of this year alone, the revenue from which the federal, state and local governments benefit increased by an impressive 15 percent. Nevertheless, party chairmen of the SPD and Greens questioned compliance with the debt rule before the coalition round this Wednesday. The coalition has already put a lot of money aside for later in a dubious campaign. It must be enough.