Germany must return to solid finances in 2023, finance minister says

BERLIN – German Finance Minister Christian Lindner said on Thursday it was necessary for Europe’s largest economy to return to solid finances next year given rising inflation and despite a darkening outlook following Russia’s invasion of Ukraine.

Germany will have suspended its debt brake for three years by the end of 2022 in order to provide extra financing to cope with the coronavirus pandemic and to set up a climate fund.

“We must return to the debt brake next year,” he said at a gathering of family businesses in Hanover.

Next year would not present any extra fiscal burden in terms of COVID-19 tests and vaccines, said the leader of Germany’s liberals who are traditionally more hawkish than other parties on fiscal matters.

Lindner defended the government’s proposed creation of a 100 billion euro special fund to modernize the German military – or Bundeswehr – saying it was a one-off investment that would be enshrined in the constitution and as such not count towards the normal budget.

“Nothing is more public than a special fund in the constitution,” he said. “It’s the opposition of a shadow budget.”