_ Dr. Ulrich van Suntum, honorary professor, University of Münster, former Secretary-General, German Expert Council for the Assessment of Overall Economic Development (SVR). 2. November 2024.*
With his “Germany Fund,” Economy Minister Habeck not only calls into question the current traffic light coalition but would also likely further devastate the country with his senseless multibillion-euro loans. Fortunately, several institutions still stand in his way.
The Coalition Agreement Break
In their coalition agreement,[1] the traffic light parties had explicitly committed to “restricting debt to the constitutionally mandated framework set by the debt brake.” The “Germany Fund” proposed by Robert Habeck represents a radical departure from this promise.[2] It is an open challenge to the liberal coalition partner.
The investment bonuses and multibillion-euro payouts for infrastructure included in the plan are unfinanceable without a massive increase in public debt. The economy minister admits this openly, describing it as merely a “limited agreement,” though the meaning of that is unclear. Moreover, Habeck said: “The first question, I think, isn’t whether it’s 200, 300, or 400 billion [euros]. It’s whether we’re willing to set off on this path.”
Such a statement shows an apparent lack of respect for the hard-earned tax revenue provided by citizens—or perhaps it is better to call them subjects. Habeck’s “impulse paper” reflects the spirit of an all-powerful state, one that claims to know precisely what is good for the economy, the environment, and the people.[3]
Bureaucracy Blamed on Putin
It’s no wonder Finance Minister Christian Lindner described the paper as a “bombshell,” accusing Habeck of advocating a fundamentally different economic policy.[4] This essentially signals the end of the coalition agreement and the start of the campaign for the next legislative period.
Habeck’s paper cleverly acknowledges the disastrous economic conditions, recently exemplified by the announcement of three German VW plants closing and the shrinking of other industries across the board. Yes, there is too much bureaucracy,[5] and the economy is indeed rightly complaining about high energy costs and taxes.[6]
Predictably, the primary blame is placed on Putin and the “climate crisis.” There is also the claim that the government is trying to make up for years of neglect by previous administrations. While the traffic light coalition has already initiated many measures, it isn’t enough, according to Habeck.
Have the Greens Become Patriots?
Then comes the same Green agenda: climate protection is a “competitive driver for future value creation,” which supposedly benefits small and medium-sized enterprises (SMEs) in particular. However, the economy needs reliable conditions, and the ban on internal combustion engines should remain in place. Government subsidies and contracts would create a “win-win-win situation,” where new technologies emerge, “and innovative companies gain their first customer (the state).”
All this is indeed stated in the paper—it’s hard to believe. Yet Habeck seems entirely serious.
The document becomes particularly interesting when it discusses its core idea: the “Germany Fund.” The name alone is surprising—have the Greens suddenly turned into patriots or even nationalists? Fear not; this is likely just election campaign marketing.
And How Will It All Be Financed?
Habeck even calls for the “consistent Europeanization” of regulatory and supervisory authorities. The Germany Fund is essentially a rebranding of his earlier proposal for a special investment fund aimed at increasing private and public investments. SMEs, too, would be eligible for a premium of 10 percent of their annual investment volume.
Unlike increased depreciation, this measure would also benefit loss-making companies. Whether this makes sense is another question. It is also unclear why building investments are excluded or why measures such as simply abolishing the solidarity surcharge weren’t considered instead. The surcharge might soon be retroactively overturned by the Constitutional Court, potentially rendering the entire traffic light budget void.
Regardless, Habeck also wants to upgrade the infrastructure through the fund. The paper outlines investment needs of “well over 100 billion” euros in transportation, 70 billion for daycare centers, universities, and schools, and 60 billion for digital infrastructure. How will all this be financed? Of course, through loans—although the debt brake, described as an “investment and growth brake,” stands in the way.[7]
The Chancellor’s Plans Hold No Significance
Recently, the International Monetary Fund (IMF) criticized the spiraling global public debt as a central risk to the world economy. Europe offers ample cautionary examples of its long-term negative effects. In addition to well-known problem countries such as Italy and Greece, France has now joined their ranks.
Habeck’s strategy of fostering sustainable economic growth through state interventions and ever-increasing debt has yet to succeed anywhere. Even if one believed in it, European fiscal rules would block such an approach from the outset. Surely, the Climate Minister is aware of this, and as such, his proposal holds little relevance for current policy.
That said, the paper does include some valid ideas. Easing data protection regulations and addressing the burdensome supply chain law are certainly desirable.[8] The same applies to the proposed reduction of electricity taxes and improvements to the crumbling infrastructure. However, these measures require funding, necessitating cuts elsewhere if further debt is to be avoided.
Under the Traffic Light Coalition, These Ideas Will Remain a Dream
There are more than enough starting points for savings. Consider the many costly yet largely ineffective climate protection projects or the skyrocketing expenses of social benefits and illegal immigration. None of these issues are addressed in Habeck’s paper.
He could have simply included a statement that Germany has already provided sufficient unilateral contributions and that climate targets would now be temporarily put on hold. Instead, the country could focus on returning to greater market-driven policies, secure borders, and realistic environmental and social policies.
Such a program would likely spark spontaneous jubilation across Germany. One could hardly imagine a better investment strategy. However, under the traffic light coalition, it will likely remain just a dream.
Notes
[1] SPD, Bündnis 90/Die Grünen, FDP (2021). Koalitionsvertrag 2021–2025: Mehr Fortschritt wagen – Bündnis für Freiheit, Gerechtigkeit und Nachhaltigkeit. URL: https://www.spd.de/fileadmin/Dokumente/Koalitionsvertrag/Koalitionsvertrag_2021-2025.pdf
[2] Hannes M. (2024). Habecks Deutschlandfonds: Hoffnung oder Illusion? Junge Freiheit. URL: https://jungefreiheit.de/wirtschaft/2024/habecks-deutschlandfonds-hoffnung-oder-illusion/
[3] BMWK (Bundesministerium für Wirtschaft und Klimaschutz) (2024). Impulspapier: Update für die Wirtschaft. URL: https://www.bmwk.de/Redaktion/DE/Downloads/P-R/Pressemitteilungen/impulspapier-update-fuer-die-wirtschaft.pdf?__blob=publicationFile&v=2
[4] Van Suntum U. (2024). Rentenreform der Ampel: Aus Riester wird Lindnern. Junge Freiheit. URL: https://jungefreiheit.de/wirtschaft/2024/rentenreform-der-ampel-aus-riestern-wird-lindnern/
[5] Hannes M. (2024). Endstation Bürokratie: Darum ist Deutschland für Unternehmen unattraktiv. Junge Freiheit. URL: https://jungefreiheit.de/wirtschaft/2024/endstation-buerokratie-darum-ist-deutschland-fuer-unternehmen-unattraktiv/
[6] Schmidt M. (2024). Energiepolitik: Habecks verheerende Folgen. Junge Freiheit. URL: https://jungefreiheit.de/wirtschaft/2024/energiepolitik-habeck-verheerende-folgen/
[7] Junge Freiheit. (2024). Streit um Schuldenbremse: Jetzt droht Kubicki mit FDP-Rückzug aus der Regierung. URL: https://jungefreiheit.de/politik/deutschland/2024/streit-um-schuldenbremse-jetzt-droht-kubicki-mit-fdp-rueckzug-aus-der-regierung/
[8] Junge Freiheit. (2024). Bundesregierung will Textilien nach neuen Regeln einkaufen. Junge Freiheit. URL: https://jungefreiheit.de/politik/deutschland/2024/bundesregierung-will-textilien-nach-neuen-regeln-einkaufen/
* Original publication in the German newspaper “Junge Freiheit”.