Weekly developments in German federal parliament, Bundestag
In a bid to tackle the ongoing COVID-19 pandemic and its severe economic impact, the German Bundestag is set to pass a resolution declaring an extraordinary emergency situation, affecting both the revenue and expenditure sides of the federal budget. This resolution paves the way for the approval of a second supplementary budget for 2021, totalling 60 billion euros.
The budget, a key fiscal tool, is part of a broader set of measures during 2020 and 2021, where around 130 billion euros had already been spent on supporting the economy through subsidies and loans. This budget aims to help cushion the blow from renewed lockdowns in late 2020 and the second wave of the pandemic in 2021, which interrupted economic recovery and led to a higher-than-expected budget deficit.
The budget's primary focus is on social protection, economic stabilization, and supporting businesses through the prolonged pandemic period. Specific fiscal measures include extensive social support payments, subsidies for companies, and measures to stabilize jobs and income, continuing existing schemes such as Kurzarbeit support well into 2022. The suspension of the debt brake, a constitutional rule limiting government borrowing, allows the government to fund these extraordinary expenditures without immediate fiscal constraints.
The second supplementary budget will not increase the net credit intake for the year 2021. Its aim is to catch up on investments in climate protection and stimulate the economy, providing planning security for private investments in digitization. By the end of 2023, the pesticide glyphosate will be removed from the market.
Meanwhile, Germany's economic growth recorded a positive note in 2021, with a growth of 2.7 percent. However, the further economic development will continue to be significantly influenced by the course of the COVID-19 pandemic and geopolitical situation.
In other news, the German Armed Forces will continue to play a crucial role in the Middle East, particularly in Iraq, where their presence remains vital to prevent the resurgence of IS and contribute to more reconciliation in the region. The mandate of the German Armed Forces to combat IS terrorism and stabilize Iraq will be extended until 31 October 2022.
Lastly, a comprehensive food strategy is being developed to ensure clear criteria for animal and environmental protection, sustainable nutrition, and fair working conditions. By 2030, the goal is to achieve 30 percent organic farming in Germany, and by the end of 2022, a binding animal husbandry labeling system is planned to be introduced, covering transport and slaughtering.
The Annual Economic Report 2022, summarizing key economic developments and providing an outlook for 2022, will be decided upon by the cabinet on Wednesday. The report includes a 20-page appendix with additional indicators, such as education, resource use, distributive justice, and environmental destruction. The prognosis for the end of 2022/beginning of 2023 is cautiously optimistic.
- The German government is utilizing policy and legislation, including the approval of a second supplementary budget for 2021, to address climate change and stimulate the economy, a crucial part of their overall environmental science approach.
- Despite the focus on tackling COVID-19 and its economic impact, the German government has not overlooked personal finance matters. Budgeting for 2022 includes plans for a binding animal husbandry labeling system, aiming for fair working conditions and sustainable nutrition.
- In the realm of politics and policy, the German Bundestag has suspended the debt brake, a constitutional rule limiting government borrowing, to fund extraordinary expenditures related to the ongoing pandemic and climate protection investments.
- The resolution passed by the German Bundestag not only affects the country's general news and finance but also extends to war-and-conflicts, as the mandate of the German Armed Forces to combat IS terrorism and stabilize Iraq will continue until October 2022.
- The Annual Economic Report 2022 will cover not only economic matters but also educational, resource, and distributive justice indicators, as well as environmental destruction, demonstrating a comprehensive approach to economic development.
