In an interview, Federal Finance Minister Christian Lindner explains why he is sticking to the debt brake. Regarding the gap in the federal budget, he says: “Only a minority of the ministries have not adhered to the agreements and resolutions, but they have paid large sums of money.”
FOCUS online: Mr. Lindner, do you feel like a relic, a man from yesterday?
Christian Lindner: No. Why?
Because you seem to be pretty much the only one who still wants to stick to the debt brake in the traffic lights.
Lindner: There is indeed a strong desire for more debt. This was known to the SPD and the Greens, but to CDU politicians like the Governing Mayor of Berlin it is sad news. But it doesn’t make economic sense because we pay high interest rates. Instead of using more taxpayer money for interest in the future, I would rather invest directly in schools, for example. In this stance I feel supported by the majority of citizens.
The per capita debt burden of German citizens due to state liabilities has now reached almost 30,000 euros for each individual, and the Taxpayers’ Association is complaining about the increasing rate of debt. Does the brake still work?
Lindner: What is crucial is the ratio of debt to the country’s economic strength. When I came into office, that debt ratio was 69 percent. Now we are at 64 percent. The direction is right. If we continue to be disciplined, we will soon reach pre-Corona levels.
And then we can attack again?
Lindner: If it’s below 60 percent, I also have suggestions as to how we can get more financial leeway. To put it concretely: If we don’t take on more and more debt now, then we can save a good ten billion euros every year when paying off the Corona debt. Money that is then available for new priorities.
We read that there is a lack of between 15 and 30 billion euros for the 2025 federal budget. How big is the gap really?
Lindner: I will not give an official figure for the need for action. Only a minority of the ministries have not adhered to the agreements and resolutions, but they have done so by paying large sums. That is why, in the interests of everyone, I cannot use their additional demands as a basis for business.
They are referring to the foreign, interior, defense and development aid departments, which do not want to make savings but, on the contrary, demand more money.
Lindner: These departments have gone public with their additional demands. But it is clear to me that we have to set priorities. For me, firstly, it is the economic turnaround so that we can have growth again and be able to afford social and ecological projects in the future. Secondly, investments in education, digitalization and infrastructure. Thirdly, national and alliance defense.
Can the coalition collapse over the budget dispute?
Lindner: A government needs a budget. And given the weak growth, there is also the need to get our economy back on track.
What austerity cruelties can we expect?
Lindner: I reject the word cruelty. We spend significantly more money than in 2019. On social issues alone, 42 billion euros more per year than five years ago. This clearly shows that we have an output problem. People cannot generate wealth as quickly as some people want to distribute the money. That’s why it’s time to change course.
That means: save. And that can hurt – even if they reject the word “cruelty”.
Lindner: Germany is the fourth largest economy in the world, but we are the second largest donor for international projects. No other G7 country made as much as we did last year in terms of economic size. This cannot continue because we need to focus on hard security and supporting Ukraine. We will also discuss the accuracy of the welfare state. We have to get more people from citizens’ benefit into work. We cannot tolerate when benefit recipients prefer citizens’ benefit to jobs offered.
Are you afraid that you will once again be seen as a “party of social coldness” if you want to cut social benefits?
Lindner: On the contrary, social justice has two sides. On the one hand, solidarity with those in need. Nobody should fall into the ground after a stroke of fate. On the other hand, everyone should only use solidarity for as long and as far as necessary. Please never forget that every social benefit from the state is financed by someone giving something from their earned income.
What about aid to Ukraine and the defense budget? Are they untouchable for you?
Lindner: In the face of Russian aggression, Ukraine is our first line of defense. At the same time, we must strengthen our own capability for national and alliance defense. I doubt that in the last 25 years a finance minister has made more possible for the Bundeswehr than I have. For example, the special program of 100 billion euros for the Bundeswehr was based on my initiative.
The European elections are coming up, and people in Brussels would also like to spend more money. How do you assess the desires there?
Lindner: We need a strong Europe where we cannot achieve a solution nationally. For me, the internal market, trade policy and migration control are European tasks. But we don’t need more and more small-scale bureaucracy. We are fighting against them, as we saw with the supply chain directive. We were at least able to improve it, although unfortunately not completely rebuild it. What we also don’t need is new community debt in the EU, which EU Commission President Ursula von der Leyen recently mentioned again.
What did you dislike about it?
Lindner: Every EU member state must remain responsible for its own public finances. With joint debts, taxpayers in Germany would be held liable for politics elsewhere. This not only endangers financial stability, but also democratic acceptance.
The EU has already broken an old taboo for reconstruction aid after the corona pandemic and has taken on large amounts of debt for the first time…
Lindner: This was clearly marked as a one-off measure and tied to reform efforts. The then Dutch Prime Minister Mark Rutte, a liberal, had achieved a major negotiating success against the CDU and SPD in Germany.
You don’t seem too happy with Ms. von der Leyen’s work so far.
Lindner: With all personal respect: If I assess the political content, then Ms. von der Leyen did not lead the commission as a German CDU politician, but as a Green Party. Endless bans such as the combustion engine, expensive requirements for homeowners such as renovation obligations for buildings, and always new ideas for debt. We were able to mitigate some of this with a lot of work. But it would be better to have an EU Commission that focuses on freedom, competitiveness and innovation.
How do you reduce bureaucracy in your department? German tax law is considered one of the most confusing in the world.
Lindner: We make progress every year. Think of the tax exemption for the private solar system on the roof, the simplified calculation of the home workplace and other things. Now comes the mobility budget for employees in the payroll tax. My vision is the almost automated tax return online, via app; Time required: under an hour, including artificial intelligence.
Given the very modest successes of the Online Access Act to date, I am not very confident that I will be able to enjoy this in my lifetime…
Lindner: You seem fit to me. Joking aside, system changes don’t happen overnight. But it shouldn’t take too long.
Let’s get back to the European elections and the fate of Ms von der Leyen, that couldn’t be very fun either. Can she count on the votes of the FDP MEPs if she wants to be re-elected to the top of the EU Commission after the European elections?
Lindner: That depends on the content. At the moment it seems as if Ms. von der Leyen is wooing less middle-class voters in Germany and more the French and Italian governments.
If von der Leyen fails, according to your traffic light coalition agreement, the German Greens will be allowed to appoint a commissioner. Do you really want to pave the way to Brussels for the green Europe expert Anton Hofreiter?
Lindner: That’s a fairy tale from the CDU. There are no names in the coalition agreement. And such important personnel will still be discussed intensively.
Who do you want to quickly pull out of the hat instead of Ursula von der Leyen?
Lindner: What bothers me is that the confirmation of Ms. von der Leyen is seen as a sure-fire success even before the election. It’s not her. Because the citizens still have to set the direction, then the Council and Parliament will decide. What Germany does will be seen in the light of the results.
What do you see as the EU’s priority tasks after the election?
Lindner: Competitiveness. Economic strength is a factor in geopolitics with regard to Russia and China. And we have to stick with managing and controlling migration.