Energy price support will cost the federal government more than 121 billion euros in 2023 – politics
It was clear that it would be expensive. Now, for the first time, however, there is a specific figure on the table as to how much money the federal government intends to spend in the coming year alone to support the plagued gas and electricity customers in Germany: According to the Ministry of Finance, it is all in all more than 121 billion euros.
This emerges from an updated template for the preparation of the 2023 budget, which the budget committee of the Bundestag wants to deal with this week and which is available to the SZ. The 511-page volume also lists additional billions in expenditure by the individual ministries that have arisen since the budget draft was approved at the beginning of July. These include, among other things, the costs for the introduction of a share pension and the new citizens’ benefit as well as additional costs caused by the economy.
As can be seen from the proposal for the so-called adjustment meeting of the Budget Committee this Thursday, the planned gas and electricity price brakes alone will cost 40.3 billion and 43 billion euros in 2023, respectively. 15.2 billion euros are earmarked for the state’s participation in the ailing gas importer Uniper, and 8.5 billion euros for the stabilization of other energy suppliers that may become necessary.
In addition, there are six billion euros for the support of hospitals and care facilities as well as hundreds of millions for tenants, cultural institutions, universities, small and medium-sized companies and other “hardship cases”. However, the state’s actual expenditure will depend heavily on how gas and electricity prices develop in the coming year.
Interest expenses alone will increase tenfold compared to 2021
Overall, the federal government wants to mobilize up to 200 billion euros by the end of April 2024 to cushion the social and economic consequences of the immensely high energy prices. Since it has to borrow the money on the capital markets, around 4.4 billion euros in additional interest costs will be incurred in 2023 alone. All in all, Finance Minister Christian Lindner (FDP) expects interest payments of around 38 billion euros for next year – almost ten times as much as in 2021. The new debt, the exact number of which is still missing in the template, is likely to be more than 30 billion euros lower than this year, but almost double the July estimate.
Nevertheless, the federal government is likely to comply with the debt brake anchored in the Basic Law for the first time since the beginning of the corona pandemic – but only because all expenditure to cushion the energy price crisis is being outsourced to a so-called special fund.
According to the adjustment proposal, the introduction of the so-called share pension will cost ten billion euros in the first year. Since the reform is also financed through loans, it has no impact on the budget’s spending leeway. The idea is that the fund brings in more proceeds from shares than it generates in interest expenses and can help stabilize statutory pension insurance from the middle of the next decade. Lindner wants to pay more funds into the pot year after year. However, there is still no agreement on this in the coalition.
In the area of the Ministry of Labor, the bill provides an additional 2.9 billion euros for the new citizen benefit, which at the beginning of the year was unemployment benefit II – better known as Hartz IV – should replace. Overall, the support for the long-term unemployed would cost the federal government a good 24 billion euros. However, negotiations with the Union, which could block the plans in the Bundesrat, are still ongoing. The additional expenses are also due to the fact that Ukrainian refugees are entitled to unemployment benefit II.
The federal government’s contribution to the costs of accommodating Hartz IV recipients will be increased by 400 million euros to 10.4 billion euros. The Ministry of Building is planning additional expenditure of 2.2 billion euros, which will be incurred for the expansion of the housing benefit and the implementation of the second heating cost subsidy.