Chancellor Scholz promises a solution to the budget crisis

2023-11-29 08:40:54 / BOTA ALFA PRESS

Chancellor Scholz promises a solution to the budget crisis
German Chancellor Olaf Scholz vowed on Tuesday that his government would work "as quickly as possible" to resolve the budget crisis, but he offered few details on how he would carry out his plans to promote renewable energy. clean and modernize an economy that is in difficulty, writes the "AP" agency.

A court decision has dealt a blow to Germany's budget, reducing it by several billions.
Scholz and his coalition must decide what they want to cut from the projects planned in next year's budget, after Germany's highest court ruled that 60 billion euros of funding for renewable energy projects and price relief for consumers and businesses the high energy costs caused by the Russian invasion of Ukraine violate the debt limit established by the Constitution.

Cuts to be made next year could further slow Germany's recovery. Germany is the worst performing large economy in the world.
"Germans need clarity in volatile times," Scholz told the German Parliament.

He promised that the Government will not abandon its goals to significantly reduce carbon emissions from fossil fuels, as well as focus on social policies. Scholz said that "it would be a serious and unforgivable mistake to neglect the modernization of the country".

As for reducing expenses, he said that putting a limit on consumer utility bills is no longer necessary, since energy prices have fallen. But, he said that the Government will react again if the prices increase.

"You will never walk alone", said Scholz.

The reductions will affect the need to invest in affordable renewable energy sources such as wind, solar or hydrogen and support the production of batteries or computer chips.

This has led to calls to loosen the debt limits, because they limit the Government's response to new challenges.

However, Scholz's governing coalition does not have the two-thirds needed to pass this without the help of the Christian Democrats, who took this to court.

Economists say the spending cuts will add to the challenges Germany faces after Russia cut off cheap natural gas that supplied German factories, squeezing businesses and raising the cost of living for families, who now pay more for electrical energy.

The constitution in Germany limits deficits to 0.35 percent of economic output, although the government can go beyond if there is an emergency it did not create, as was the case with the pandemic.

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