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Germany’s new Finance Minister Christian Lindner announced a plan on Friday to invest an extra €60 billion (roughly $68 billion) in climate policies.
The funding comes from the government’s remaining, unutilized debt in 2021. It is expected that it will be approved as part of Monday’s supplementary budget.
Lindner stated, “I have given the draft of the supplementary budget today to the Cabinet,” in his first appearance as finance minister.
According to the FDP, the lawmaker is a liberal pro-business Free Democrats Party. He said that the investment would “boost the economy.”
“No more borrowing”
A tweet from the finance ministry said they would “get a second supplementary budget 2021 on track to tackle the effects of the pandemic and also prepare €60 billion for future investments.”
It added, “There will not be any further borrowing.”
The German government had already taken out €240 billion in debt to support businesses during the pandemic, but had only used €180 billion.
Conservative Christian Democrats are now in opposition and question whether such a reallocation is permissible under budgetary laws.
Lindner stated that some funds would be used to “digitalize” the German economy.
FDP emerges swinging
The FDP joined a three-way coalition with the Social Democrats (SPD) and the Greens — the so-called “traffic light” coalition.
On Wednesday, the new government under Olaf Scholz, SPD’s new Chancellor, was sworn into office.
FDP held the finance minister was a long-held ambition, particularly considering that the foreign ministry post, which is often held by FDP in the past, traditionally goes to the third strongest party in a group, in this instance the Greens. They also managed to get the coalition partners to agree not to raise taxes or borrow any more money.
This has caused some to wonder where the funding for the government’s ambitious climate plan will come.
New government’s green goals
The FDP pressured the government to reintroduce the debt brake, which severely limits borrowing.
Lindner stated that only by ensuring stability in finances could we satisfy the requirement for fairness among the generations.
The coalition pledged to source at most 80% of country’s energy from renewable sources by 2030 and to increase the number of electric cars on the roads from 500,000 to 15,000,000 in that timeframe.
ab/msh (AFP, Reuters)
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