The political summer break this year cannot be described as such. Where backbenchers in the Bundestag used to fill the summer slump with advice to Greece, but please sell a few islands to reduce national debt, the situation in Germany in 2022 is too serious.
As the chancellor’s party, the SPD fears that the consequences of the Russian war in Ukraine and Vladimir Putin’s game with the gas tap will lead to serious upheavals, particularly among those with lower and middle incomes.
The almost daily defensive skirmishes between Finance Minister Christian Lindner (FDP) and the two government partners, who are demanding a further suspension of the debt brake, show how nervous the atmosphere in the traffic light coalition with the Greens and the FDP is.
“The debt brake is set,” emphasizes Lindner again and again, also via Twitter: “We have to operate within the framework provided by the constitution. Because only solid government finances, no politics on credit and reduced government spending help to fight inflation.”
On Monday, Lindner also had a report by “Bild” denied that because of his veto by Chancellor Olaf Scholz (SPD) last Friday – due to the constraints of the debt brake – he could not announce another five billion relief program. It is not true that he prevented the planned presentation of the new aid for low earners.
Lindner wrote on Twitter that “the opposite is the case”. The Federal Minister of Finance is proposing, among other things, a higher basic allowance and a fair tariff for wage and income tax for 2023. This plan is compatible with the debt brake. He also wanted a tax cut because of the high prices. It’s about low earners, but also the “working middle”, according to the FDP politician.
The back-and-forth of proposals is likely to continue over the summer over the right “autumn package” to keep the country together in this situation and support for sanctions against Russia.
The SPD parliamentary group has now also become very specific elsewhere – and some of the proposals do not even incur costs. “Nobody should lose their home because they can’t pay the utilities. Protective measures under tenancy law can provide urgently needed help here,” says the key issues paper that the Legal Working Group and the Living, Urban Development, Building and Municipalities Working Group of the Bundestag faction have drawn up. It is in front of the daily mirror. The “Süddeutsche Zeitung” was the first to report about it. SPD General Secretary Kevin Kühnert, who is renting himself, was also involved.
In individual regions, price increases for ancillary costs (heat/electricity) are forecast, “which will exceed the previous cold rents by a multiple (!)”. Quite a few in the coalition fear severe social tensions, especially since the middle class in particular could be affected by back payments of several thousand euros.
The SPD politicians therefore propose a moratorium on dismissals so that payments can only be made later. “Ordinary and extraordinary terminations of residential tenancies due to non-payment of the additional payment for operating costs are excluded for the billing periods 2021 and 2022 for six months from the billing of the costs,” the paper says. The same should also apply if significantly higher operating cost advance payments cannot be made.
However, to ensure that the landlords do not get into difficulties as a result – especially those who have acquired the property as a pension provision – the following is planned: If landlords can prove that the above-mentioned exclusions from termination represent an unreasonable hardship for them, they should be offered an interest-free lease to bridge the gap loan is granted.
“The loan should only become due after the expiry of the ban on termination.” In the case of credit-financed real estate, lenders’ claims for repayment, interest or principal payments should be deferred for this period.
In addition, electricity or gas cuts are excluded for unpaid bills, “so that low-income households do not have to spend cold days in unheated apartments”. However, it is also important to have a parallel concept to support the municipal suppliers, such as the municipal utilities, so that they do not get into difficulties with unpaid bills – the association of municipal companies calls for a state municipal utility protective shield.
In addition to the housing benefit reform announced by Scholz and other aid for low earners, students and trainees, long-term measures are also required as a consequence of the energy price crisis. For example, the rental price brake – albeit only having a limited effect – is to be extended until 2029 and rents in tense markets are generally not allowed to rise as much for new rentals.