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Tuesday, May 17, 2022

Billions for the Bundeswehr instead of shared pensions: how the Ukraine war is delaying the government’s prestigious projects

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Course change: Chancellor Scholz (left) and Finance Minister Lindner have some prestigious projects

This week, the Bundestag is discussing the budget for 2022. It is one of the most important weeks of the parliamentary year, because only projects for which money has been budgeted can be implemented. On the contrary, this means: if no money is planned for it, nothing will come of it, at least not for the time being.

The war in Ukraine is presenting the government with entirely new problems. It is clear that the stoplight parties want to spend more money on the Bundeswehr. The costs of caring for Ukrainian war refugees are also unpredictable. After all, the SPD, the Greens and the FDP also want to ease the burden on citizens due to rising electricity, gas and petrol prices. To meet these costs, the Finance Minister, Christian Lindner (FDP), has already announced a supplementary budget in addition to the 460,000 million euros provided for in the basic budget.

Another effect of the war is that some prestige traffic light projects will likely be delayed. How that stock annuity, with which you want to create the entry in the funded old-age forecast. The promise in the coalition agreement was clear: “In 2022” they want to add a share capital of ten billion euros to the pension insurance of the budget funds, the SPD, the Greens and the FDP wrote in the coalition agreement. Just over 100 days later, it’s clear that the semaphore probably won’t deliver on this. The ten billion is not in the budget, so implementation is unlikely.

CDU social politician Kai Whittaker complained that the semaphore is showing the younger generation in particular how unimportant their futures are in the daily political work of the semaphore.

However, the FDP parliamentary group in the Bundestag says they are confident that the joint-stock pension can still be launched this year as promised. That also works regardless of whether the ten billion is in the government’s draft budget or not. The Hubertus Heil Ministry of Labor (SPD) also says that the timetable must still be adhered to.

Budget experts, however, doubt it. Although unscheduled expenses are always possible in theory, a part of ten billion euros is not easy to manage. The problem: the shared pension has not yet reached “budgetary maturity.” First of all, a law must determine exactly how it should be structured. New jobs will probably also have to be created. All this has not yet been clarified.

Basic child safety and citizen income won’t come soon either

He too Basic child safety it won’t come soon. Actually child allowance, child allowance and also support with learning or a school ticket should be simplified and summarized in it.

But this project is very complicated, and there is no finished concept here either. However, the traffic light agreed to a monthly subsidy to close the gap. Therefore, from July 1, around 2.9 million children affected by poverty will receive an additional 20 euros per month. This subsidy should apply until basic child safety is introduced.

The “citizen money“, which is supposed to replace Hartz IV, is also not provided for in the budget. It is only stipulated that the sanctions are currently being abolished. Especially child protection and citizen benefit are very complicated to rewrite these laws, to recalculate rates, all of this takes time. Even if the government wants to implement all these projects in the next year, that is ambitious, because the Bundestag is supposed to decide on the budget for 2023 from September.

However, some major drafts of the stoplight coalition agreement are coming soon. The minimum wage will increase to 12 euros an hour from October 1. This can be implemented because the state does not have to spend additional money for the project.

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