German politicians spent much of this week discussing the new federal budget. As Sabine Kinkartz writes, there was plenty of back-patting from those involved, yawning from everyone else, and very little real debate.
Germany's budget week has just ended. Over four days, the members of the German Bundestag, the lower house of parliament, spent a total of 35 hours discussing how much the federal government can afford to spend this year and who should get the money. At least that's what was on the agenda. But in reality, the talks were about a lot more - about the parliamentary term that's just got underway and, especially, about the year 2015.
Hanging over everything though, was the plan to get the budget back in the black. What didn't succeed in 2011 because of Europe's financial crisis will finally have to materialize in 2015.
As of 2015, the government plans to spend only as much as it earns. It sounds obvious, but the last time Germany submitted a budget without any new borrowing was back in 1969. Since then, the country has racked up an inconceivable 1,300,000,000,000 euros ($1,800,000,000,000) in debt.
The debt isn't going anywhere
From 2015, it will be important to ensure the debt doesn't increase any further - it is not a question of repaying all the country's debts. Although Finance Minister Wolfgang Schäuble had good intentions, and said he wanted to pay off at least a few billion by 2017. He shouldn't have to work very hard to achieve that - because of the low interest rate, Germany only has to pay about 30 billion euros in interest for existing loans. A few years ago it was more than 40 billion euros.
Right now the German economy is performing well, more people are working than ever before, and that means ample tax revenue for the state. So creating no new debt shouldn't be a particularly special art.
But those with money usually want to spend it. And this urge is especially strong among politicians. Who is going to receive these funds? The voters of course, because expensive gifts score popularity points.
Older people make up the majority of the electorate, so it makes sense that there is more in the budget for future retirees than young people. The coalition of Christian conservative parties led by Chancellor Angela Merkel has chosen to reward mothers who had children before 1992, and who stayed at home instead of going to work. While junior coalition partner, the Social Democrats, wants to give people who have worked for 45 years the chance to retire at the age of 63.
Not enough in the piggy bank
There's nothing fundamentally wrong with either of those proposals. But critics who argue the pension package will cost at least 175 billion euros by 2030 have a point. So far the federal government has been tight lipped about who will foot the bill.
The Union parties and the SPD could finance the scheme until the end of their current term in 2017, since a portion of the money will come from existing pension fund surpluses. We'll just have to wait and see whether there's still something left in those funds come 2017.
"We can afford it," the finance minister said in this week's budget debate. How nice. But shouldn't the money go towards improving schools and colleges, or fixing roads and bridges? Wouldn't it be better to invest the extra money rather than simply spend it?
During the budget debate, Merkel admitted these were important points. Over the next four years, the government will give 6 billion euros in funding to local authorities for day care centers, schools and colleges. An additional 3 billion euros will be injected into research and development, and 5 billion euros will go towards transport infrastructure.
"I know that it could be more, but for now it's 5 billion more," the chancellor said.
The phrase "we can afford it" suddenly sounds rather ambiguous. The CDU and SPD can afford their policies, mainly because they have an overwhelming majority in parliament, and the opposition is no match for them. Anyone who followed the four hour general debate on Wednesday (9.04.2014) can guess what will happen to Germany over the next four years.
Normally the general debate means experts from the government and opposition going head to head in a heated exchange. This time, the debate was just plain boring. Because of the parliament's make-up the opposition was only granted the floor for one hour. And they didn't use it well at all.
The Left and the Greens were verbally weak and far too well-behaved. Then the government spent three hours patting itself on the back, with the CDU, CSU and SPD, congratulating each other on their political projects. As a result, hardly anyone tuned in, and many MPs spent most of the time playing on their mobile phones. A depressing sight indeed.
But now the budget week is over, and in theory, the real work can begin. This week was only the first reading. Next, parliamentary committees will have their chance to discuss the document. No big changes are expected, because there is really no reason for the government to negotiate. At the end of June, the budget will be read for a second and third time, and debated again in parliament before it is adopted.
In the meantime, the Finance Ministry is drafting the 2015 budget. The first reading of that document is due to happen in September, the second and third readings at the end of November. It remains to be seen whether that budget week will pass as smoothly and silently as the one we've just had.
New bidding for licenses to explore for shale gas in the United Kingdom began again, ending a three-year hiatus. Britain is looking to reduce its reliance on foreign energy imports.
EU countries have long offered preferential visas to wealthy foreigners looking to park their money, but now that system has taken on a life of its own. Requisites for gaining access to 'Fortress Europe' are vanishing.
Russian stock markets have fallen for the third day as the specter of new EU sanctions chills investors. Speculators lost appetite for Russian risk after Moscow was ordered to compensate former Yukos shareholders.